Economy
OECD cuts global growth outlook to 2.9% for 2025 due to trade war
Global economic growth is expected to slow down to 2.9%, the OECD said on Tuesday, slashing its earlier forecast and warning that U.S. President Donald Trump’s tariffs blitz will stifle the world economy, hitting the United States especially hard.
After 3.3% growth last year, the world economy is expected to expand by a “modest” 2.9% in 2025 and 2026, according to the Paris-based Organisation for Economic Co-operation and Development (OECD).
In its previous report in March, the OECD forecasted growth to be 3.1% for 2025 and 3.0% for 2026.
Since then, Trump has launched a wave of tariffs rattling financial markets.
“The global outlook is becoming increasingly challenging,” said the OECD, an economic policy group of 38 mostly wealthy countries.
It said “substantial increases” in trade barriers, tighter financial conditions, weaker business and consumer confidence and heightened policy uncertainty will all have “marked adverse effects on growth” if they persist.
The OECD downgraded its 2025 growth forecast for the U.S. from 2.2% to 1.6%.
The world’s biggest economy is expected to slow further next year to 1.5%.
Trump, who has insisted that the tariffs would spark a manufacturing revival and restore a U.S. economic “Golden Age,” posted on his Truth Social platform before the OECD report’s publication: “Because of Tariffs, our Economy is BOOMING!”
The OECD holds a ministerial meeting in Paris on Tuesday and Wednesday, with U.S. and EU trade negotiators expected to hold talks on the sidelines of the gathering after Trump threatened to hit the EU with 50% tariffs.
The Group of Seven advanced economies is also holding a meeting focused on trade.
“For everyone, including the U.S., the best option is that countries sit down and get an agreement,” OECD chief economist Alvaro Pereira said in an interview with Agence France-Presse (AFP).
“Avoiding further trade fragmentation is absolutely key in the next few months and years,” Pereira said.
Trump imposed a baseline tariff of 10% on imports from around the world in April.
He unveiled higher tariffs on dozens of countries but has paused them until July to allow time for negotiations.
The U.S. president has also imposed 25% tariffs on cars and plans to raise those on steel and aluminum to 50% as of Wednesday.
U.S. slowdown
In the OECD report, Pereira warned that “weakened economic prospects will be felt around the world, with almost no exception.”
He added, “Lower growth and less trade will hit incomes and slow job growth.”
The outlook “has deteriorated” in the U.S. after the economy expanded by a robust 2.8% last year, the report said.
The effective tariff rate on U.S. merchandise imports has gone from two percent in 2024 to 15.4%, the highest since 1938, the OECD said.
The higher rate and policy uncertainty “will dent household consumption and business investment growth,” the report said.
The OECD also blamed “high economic policy uncertainty, a significant slowdown in net immigration and a sizeable reduction in the federal workforce.”
While annual inflation is expected to “moderate” among the Group of 20 economies to 3.6% in 2025 and 3.2% in 2026, the U.S. is “an important exception.”
U.S. inflation is expected to accelerate to just under 4% by the end of the year, two times higher than the target for consumer price increases set by the Federal Reserve (Fed).
Rising risks
The OECD also slightly reduced its growth forecast for China – which was hit with triple-digit tariffs that have been temporarily lowered – from 4.8% to 4.7% this year.
Another country with a sizeable downgrade is Japan: The OECD cut the country’s growth forecast from 1.1% to 0.7%.
However, the outlook for the eurozone economy remains intact at 1%.
Türkiye’s economy, on the other hand, is estimated to expand by 2.9% in 2025 and 3.1% in 2026, which is also down from the previous estimate of 3.1% for this year and 3.9% for 2026.
“There is the risk that protectionism and trade policy uncertainty will increase even further and that additional trade barriers might be introduced,” Pereira wrote.
“According to our simulations, additional tariffs would further reduce global growth prospects and fuel inflation, dampening global growth even more,” he said.
Türkiye’s stock exchange, Borsa Istanbul, has been accepted as a “Recognised Stock Exchange” by His Majesty’s Revenue and Customs (HMRC), the U.K.’s tax, payments and customs authority, the institution said in a statement on Wednesday.
“Aiming to make our capital markets more visible and accessible, particularly among U.K.-based investors, Borsa Istanbul, with this step, also contributes to efforts to increase foreign investors’ interest in our markets,” it said.
Moreover, with recognition of Borsa Istanbul, “it will be possible for investors resident in the United Kingdom to benefit from tax advantages on their investments in our capital markets,” it added.
“Income earned by holders of Individual Savings Accounts (ISA) from their investments in ‘Recognised Stock Exchanges’ is exempt from taxation in the United Kingdom,” the statement further said.
It also mentioned that lease certificates traded on such recognized exchanges are evaluated under the category of “Alternative Finance Investment Bonds” in the U.K., which it said, “simplifies investors’ decision-making and reporting processes and reduces the compliance burden.”
In addition, it suggested that a “Recognised Stock Exchange” is a designation attributed by His Majesty’s Revenue and Customs “to qualified exchanges that meet certain criteria,” explaining that it means that thereafter it is officially recognized within the scope of U.K. tax legislation.
Borsa Istanbul also provided a list of “Recognised Stock Exchanges,” including major exchanges operating in various countries, such as the “New York Stock Exchange,” “Nasdaq,” “Euronext,” “London Stock Exchange” and others.
Anadolu Agency (AA) reported earlier this month that Turkish authorities were weighing different incentives to draw global investors. The measures come amid ongoing global crises and reportedly include lowering corporate tax for manufacturer-exporters, while also special tax regimes for foreigners are said to be under consideration.
Turkish markets have managed to maintain the positive trend they built at the start of the year during the first quarter and throughout April, despite the conflict between the U.S., Israel and Iran.
Oil prices jumped on Wednesday, reversing earlier losses after reports of gunfire attacks on at least three container ships in the Strait of Hormuz and a lack of progress in peace talks between the U.S. and Iran.
Brent crude futures were up 73 cents, or 0.7%, at $99.21 a barrel at 1049 GMT. West Texas Intermediate futures were up 59 cents, or 0.7%, to $90.26. Both benchmarks climbed about 3% on Tuesday.
At least three container ships were hit by gunfire in the Strait of Hormuz on Wednesday. Iran’s Revolutionary Guards seized two vessels for what it described as maritime violations and transferred them to Iranian shores, the semi-official Tasnim news agency reported.
Iran and the U.S. have imposed restrictions on ships using the strait, which until the Iran war began at the end of February had carried about 20% of global oil and liquefied natural gas supplies.
Earlier, U.S. President Donald Trump said he would indefinitely extend the cease-fire with Iran, hours before it was due to expire. Neither side showed up for peace talks in Pakistan.
The cease-fire announcement appeared to be unilateral, and it was not immediately clear whether Iran, or U.S. ally Israel, would agree to extend the truce, which began two weeks ago.
A Liberia-flagged container ship was reported on Wednesday to have sustained damage to its bridge after being hit by gunfire and rocket-propelled grenades northeast of Oman.
The United Kingdom Maritime Trade Operations (UKMTO) said the master of the vessel reported being approached by an Iranian gunboat. The vessel, it said, was subsequently fired upon. All crew members were safe and there was no fire or environmental impact due to the incident.
Maritime security sources said that three people were onboard that gunboat.
The master of the Greek-operated container ship also reported that no radio contact was made prior to the incident and that the vessel had been initially informed that it had permission to transit the Strait of Hormuz.
The UKMTO later said that a second container vessel had been fired upon about eight nautical miles west of Iran. The Panama-flagged vessel was not damaged and its crew members are safe.
Maritime security sources said that a third container ship was fired upon about eight nautical miles west of Iran while transiting outbound of the Strait of Hormuz. The Liberia-flagged vessel, which was not damaged had stopped in the water. Its crew are safe, the sources said.
In Europe, Ukrainian President Volodymyr Zelenskyy said the Druzhba pipeline carrying Russian oil was ready to resume operations. Three industry sources, however, said Russia was set to stop oil exports from Kazakhstan to Germany via the pipeline from May 1.
Later on Wednesday, the U.S. Energy Information Administration is due to publish weekly inventory data. Crude stocks fell by 4.5 million barrels last week, while gasoline and distillate stocks also declined, market sources said, citing American Petroleum Institute figures.
Analysts estimated a 1.2 million-barrel draw of crude for the week ended April 17.
“If the EIA confirms the draws and U.S. weekly exports of both crude oil and refined products remain robust, this will be taken as confirmation that consumers in Europe and the Far East are scrambling to secure oil supplies wherever, whenever, and however they can,” PVM analysts said.
Shares of Deutsche Telekom slipped 1.5% on Wednesday after reports of potential merger talks between the German telecoms conglomerate and U.S.-based T-Mobile US, which would be the largest ever public merger if it goes ahead.
Details of the early-stage talks were reported by Reuters, which cited two sources familiar with the matter on Wednesday. Telekom, which already holds a majority 53% stake in T-Mobile, did not respond to a request for comment.
Bloomberg first reported the potential deal.
Any combination, which would need buy-in from Germany, which is Deutsche Telekom’s single biggest shareholder, would create the world’s biggest wireless operator by market capitalization, with operations spanning the United States and Europe.
T-Mobile’s market value is about $218 billion, while Deutsche Telekom has a valuation of about $166 billion.
While the discussions are at a preliminary stage, the proposed idea is for a new holding company that would make a stock bid for both companies, owned by existing investors, and then list in the U.S. and Europe, Bloomberg said.
The German stake is roughly split between the government and state-lender KfW, whose stake could be diluted in a merged entity.
The deal would create a giant firm with potentially greater liquidity, which could also be useful for future dealmaking, according to a person familiar with the matter, speaking on condition of anonymity because the matter is private.
T-Mobile’s stock has lost a quarter of its value in the last year, while Deutsche Telekom’s shares have lost 10%.
Inflation in the U.K. jumped to 3.3% in March from 3.0% in February, official data showed on Wednesday, driven mainly by a notable rise in energy prices following the start of U.S. and Israel’s war with Iran.
Factory gate prices also jumped and by much more than expected, the figures from the Office for National Statistics (ONS) revealed.
Economists said the increases – driven largely by fuel – were unlikely to push the Bank of England’s (BoE) Monetary Policy Committee (MPC) to raise interest rates as soon as next week’s meeting, and the key question was whether the jump in energy prices would ignite a broader inflation problem.
“Inflation will probably fall to 2.9% in April as the big hikes in regulated prices drop out of the annual comparison,” said Ruth Gregory, deputy chief U.K. economist at Capital Economics.
“But the next eight months will be an uncomfortable ride for the MPC.”
Economists polled by Reuters had mostly expected the headline consumer price inflation rate to accelerate to 3.3%, driven by a rise in petrol and other fuel costs in March.
The price of motor fuels jumped by 8.7% on the month, the biggest rise since June 2022, shortly after Russia’s full-scale invasion of Ukraine, the ONS said.
The data showed services price inflation – which the BoE watches closely as a sign of longer-term inflation pressures – rose unexpectedly to 4.5% from 4.3% in February.
But much of that increase was due to a rise in air fares driven by the timing of the Easter holidays.
Core inflation, which excludes more volatile food, energy, alcohol and tobacco prices and is also watched closely by the BoE, weakened to 3.1% from 3.2% in February.
War impact
Before the U.S.-Israeli war on Iran began on Feb. 28, the BoE said Britain’s inflation rate – the highest among the G-7 economies for much of the last four years – was likely to be close to its 2% target in April.
But last month, the BoE sharply increased its inflation forecast due to the energy price shock, predicting it would rise toward 3.5% by the middle of 2026.
The International Monetary Fund (IMF) last week predicted British inflation would peak at 4% in the coming months.
However, the BoE’s interest rate-setters have mostly said it is too soon to know what the rise in headline inflation will mean for underlying price pressures in the economy, given the weak jobs market, which could make it harder for workers to demand higher pay or for businesses to pass on higher costs.
The British central bank is expected to keep borrowing costs on hold on April 30 at the end of its next scheduled Monetary Policy Committee meeting.
Financial markets on Wednesday were betting on one or possibly two quarter-point interest rate rises by the BoE this year. But a Reuters poll of economists showed most expected no change in borrowing costs during 2026.
The ONS figures showed cost inflation reported by manufacturers, some of which will filter through into consumer prices, soared last month.
Producer input price inflation leapt in March alone by 4.4%, the second biggest monthly increase since records began in 1984, behind only the increase in March 2022 due to the energy price shock spurred by the invasion of Ukraine.
Producer prices charged by services firms rose by 3.0% in the first quarter, up from 2.8% in the fourth quarter, the highest reading since the third quarter of 2024.
Spain’s government on Tuesday approved a broad plan to tackle the country’s deepening housing crisis, a key political challenge for Prime Minister Pedro Sanchez ahead of elections next year.
Rising rental and housing costs are pricing many Spaniards out of the market, despite a recent economic boom. Incomes have failed to keep up. Analysts say tourism and population growth in cities driven by immigration have further strained supply.
The new plan, worth 7 billion euros ($8.23 billion), triples government investment in public housing over the next four years. It ensures that subsidized housing cannot be reclassified after a few years. It also includes help for young renters and home buyers.
“It is a significant step forward. For the first time in decades, there is a serious budgetary commitment,” said Raluca Budian, associate director of the Observatory for Decent Housing at the Madrid-based Esade business school.
About 40% of the money will be earmarked for growing the public housing supply, which Spain lacks compared to the European average, while 30% will be set aside for property renovations, the government said. That will include funds for making homes more energy-efficient and building in depopulated parts of the country.
The rest will go toward subsidies, with a focus on young people.
“The public is demanding an agreement to address the main problem currently affecting them,” Housing Minister Isabel Rodríguez said Tuesday. Housing routinely comes up as Spaniards’ top concern, according to state pollster CIS.
Housing costs in Spain rose nearly 13% year-on-year at the end of 2025, according EU statistics agency Eurostat.
Spain ranks near the bottom of Organization for Economic Co-operation and Development countries with public housing for rent, with under 2% of available supply. The OECD average is 7%. In France, it is is 14%, Britain 16% and the Netherlands 34%.
In the past, Spain built housing with public funds that later passed into private ownership. Once they were sold, they disappeared from the public housing stock.
Brazil does not favor either the United States or China as a trading partner, President Luiz Inacio Lula da Silva said Tuesday, underscoring the country’s balanced approach to global economic ties.
Lula said Brazil seeks to maintain strong and pragmatic relations with both Washington and Beijing, prioritizing national interests over geopolitical alignment.
“We want multilateralism,” Lula added during a joint declaration alongside Portuguese Prime Minister Luis Montenegro at Lisbon’s Belem Palace.
Last month, the Brazilian leader described China as his country’s “best partner,” as he welcomed investments by Chinese carmakers in Latin America’s largest economy.
“I am confident that the partnership with China is thriving,” Lula told an event marking the reopening of an automotive plant in Goias state, a partnership between Brazil’s CAOA and Chinese automaker Changan.
President of the Turkish Grand National Assembly Digital Channels Commission Elmas: Platforms will support the work done by the state
Borsa Istanbul accepted as recognized stock exchange by UK’s HMRC
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President of the Turkish Grand National Assembly Digital Channels Commission Elmas: Platforms will support the work done by the state
Borsa Istanbul accepted as recognized stock exchange by UK’s HMRC
Government ally slams Turkish main opposition’s election call
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