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Global markets resilient, buoyed by AI, OECD says: The global economy has shown some resilience to shocks ushered by US tariffs, invigorated by strong investments in artificial intelligence (AI) and related infrastructure, according to a recent report (pdf) from the Organization for Economic Co-operation and Development (OECD). The Paris-based multilateral organization doubled down on its September forecasts, predicting a slowdown in global growth from 3.2% in 2025 to 2.9% in 2026, before picking up slightly to 3.1% in 2027.
Front-loading also played a role: Among the factors behind the resilience is front-loading by producers and traders, where they ramped up goods production and exports early on to avoid planned increases in tariff rates. Chinese production and demand were strengthened by strong front-loading activity early in 2025.
What about trade growth? Global trade will also beat expectations, with OECD penciling in a 4.2% trade growth rate in 2025 and a 2.3% growth for next year. This outlook indicates that global trade growth is expected to moderate sharply in 2026 after a stronger-than-expected performance in 2025, before showing a modest recovery in 2027.
BUT- The World Trade Organization (WTO) believes the full impact of trade disruptions will materialize only next year, revising down its trade growth forecasts for 2026 to 0.5% — down from its 1.8% prediction from August. WTO’s forecasted slowdown for 2026 comes despite hiking its trade growth predictions for 2025 from 0.9% to 2.4%, which it said is primarily due to front-loading.
In a word? Fragile: The OECD highlighted that the general outlook for the future of world trade remains fragile, as any further rise in trade barriers will severely hinder supply chains and global output. If AI asset valuations turn out to be overly optimistic, AI-driven corporate earnings could face a serious risk of abrupt price corrections. AI itself is walking a fine line, as the OECD estimates that without the AI investment frenzy, the US economy would have contracted by 0.1% in 1H.
