OECD raises 2025 growth estimates. USA: tariffs weigh on GDP and inflation. Italy at 0.6%

For the European economies, the OECD expects trade tensions and geopolitical uncertainty to be at least partly offset by easier credit conditions: expected growth in the Eurozone will be 1.2 % in 2025 (0.2 % higher than the June estimates) and 1 % in 2026. In 2024, GDP growth stopped at 0.8 %. Inflation will be within the ECB target (2.1 % this year and 1.9 % in 2026).

For the OECD, Germany should be able to avoid recession in 2025, with growth at 0.3 % this year, supported by the government's expansionary fiscal policy, which will be felt especially in 2026. In contrast, the consolidation of public accounts expected from France and Italy is expected to dampen activity. France (struggling with high political uncertainty, debt crisis and protests) will see its GDP slow down from 1.1% in 2024 to 0.6% this year.

Italy, net of low growth, "is in a better position than it was a few years ago" on public accounts, "but it is important to continue to reduce debt," said OECD chief economist Alvaro Santos Pereira, responding to a question at a press conference.

In the United Kingdom, tighter fiscal policy, higher trade costs and uncertainty will weigh on external and domestic demand: the acceleration seen between 2024 and 2025, when growth rose from 1.1 to 1.4 per cent, is then expected to come to a halt in 2026, with a new slowdown towards 1 per cent.

The world's second-largest economy is paying the price of protectionism and reduced government support: despite the upward revision of estimates (+0.2% compared to June), GDP is expected to stay below 5% both this year and next.

For both countries, the adjustment of estimates from June is 0.4 %, among the highest. In Japan, robust corporate profits and strong investment growth drive GDP growth above 1%.

In India, the expansive effect prevails from the easing of monetary and fiscal policy, including the goods and services tax reform: the Subcontinent is confirmed as the fastest growing major economy, with GDP increasing by 6.7% in 2025 and above 6% in 2026.

The OECD again warns about the high volatility of cryptocurrencies and their increasing interconnection with the financial system. The market capitalisation of digital currencies reached around USD 3.9 trillion in September, up from USD 830 billion in January 2023.

The exposure of financial institutions remains limited, but is increasing with the expansion of exchange-traded products and recent regulatory developments, particularly in the US and EU. For example, stablecoins are backed by traditional financial assets, such as sovereign bonds, and pressures on valuations could trigger destabilising runaways, with broad implications for the financial system.

According to new OECD long-term estimates, global potential growth will 'slow down considerably in the coming decades', largely due to demographic factors and weak capital investment in productivity. From around 3% in 2025, global annual potential growth is expected to fall to 2.75% in the early part of the 2030s and to 2.25% in the early 2040s.

The slowdown is almost entirely due to emerging economies. While potential growth in the advanced G20 countries will fall from 1.5 % to 1.25 % between 2025 and 2050, emerging market growth will slow from 4.25 % to 1.5 % over the same period.