Brewing trade war to weigh on global growth, OECD says

The Organisation for Economic Cooperation and Development forecasts slashed its global economic growth forecast on the back of persisting inflationary pressures and the potential upheaval in trade policies brought on by US President Donald Trump’s trade war, according to the Organisation for Economic Cooperation and Development (OECD)’s latest economic forecast (pdf). The Paris-based organization revised down its prediction for global growth in 2025 by 0.2 percentage points to 3.1% in 2025 — down from 3.2% in 2024 — before slowing further to 3.0% in 2026.

There’s a number of factors at play: Weakening business and consumer sentiments in some countries, coupled with rising uncertainty over economic policy indicators, have collectively contributed to the lowered growth prospects for the year. Meanwhile, “higher trade barriers in several G20 economies and increased geopolitical and policy uncertainty” are also weighing on investment and household spending.

The effects of slowed growth could appear soon: OECD sees global growth weakening in 1Q 2025, with consumer confidence having dipped early during the year, remaining “below long-run average levels despite strong growth in real incomes in many economies,” the report reads.

The big picture: GDP growth in the US is seen coming in at 2.2% in 2025 — down from a previous forecast of 2.4% growth this year — before slowing further to 1.6% in 2026. Growth in the euro area is projected to be 1.0% in 2025, down from a previous forecast of 1.3% growth, before rising to 1.2% in 2026. Meanwhile, China’s economy is expected to grow 4.8% this year, up 0.1 percentage points from the previous forecast, before slowing to 4.4% in 2026.

Closer to home, the OECD expects the Kingdom’s GDP to grow by 3.8% this year, up 0.2 percentage points from its previous prediction in December. Economic growth is expected to slow slightly in 2026 to 3.6%.

Inflation is also seen growing at a higher rate than previously expected, with annual headline inflation in G20 economies projected at 3.8% in 2025 and 3.2% in 2026.

And higher inflation means…: Persistent inflation could “prompt more restrictive monetary policy and could give rise to disruptive repricing in financial markets.”

MARKETS THIS MORNING-

Asian markets are on the rise, tracking gains on Wall Street yesterday after US retail sales data helped ease investor concerns over a potential recession. Japan’s Nikkei and Topix are up 1.6%, while South Korea’s Kospi is up 0.6% and China’s CSI 300 gained 0.25%. Hong Kong’s Hang Seng is also up 1.9%.

Meanwhile, Wall Street futures point to another good day for US indices, with the Dow Jones up marginally and Nasdaq and S&P 500 seeing no change from yesterday.

THE CLOSING BELL-

The EGX30 rose 0.4% at yesterday’s close on turnover of EGP 4.1 bn (16.1% above the 90-day average). International investors were the sole net buyers. The index is up 5.8% YTD.

In the green: Orascom Construction (+2.2%), Eastern Company (+2.1%), and Orascom Development (+2.0%).

In the red: Juhayna Food Industries (-4.4%), Emaar Misr (-3.9%), and Rameda (-3.1%).

CORPORATE ACTIONS-

#1- Suez Canal Bank is set to increase its authorized capital to EGP 15 bn and its issued and paid-up capital to EGP 6.5 bn, pending approval of the Central Bank of Egypt, according to a disclosure (pdf).

#2- Edita Food Industries is set to double its issued and paid-up capital to EGP 280 mn after receiving the green light from the Financial Regulatory Authority (FRA), according to an FRA filing (pdf). The company will issue 700 mn shares with a nominal value of EGP 0.20 each in a bid to ramp up liquidity and strengthen the company’s financial position to support future growth.

#3- Mopco received the green light from the FRA to increase its issued and paid-up capital by EGP 7.9 bn to EGP 28.7 bn, according to a disclosure (pdf) to the EGX.