The OECD’s latest Economic Outlook sketches a world economy that, at first glance, looks surprisingly stable. Global GDP is projected to grow by around 3.2% in 2025, ease to 2.9% in 2026, and then edge up to 3.1% in 2027. Behind those neat numbers, however, the organisation sees a more complicated reality: a global system that has proved more resilient than many feared, yet increasingly vulnerable to trade tensions, elevated tariffs, stretched asset valuations and mounting fiscal risks.

The December 2025 edition, titled “Resilient Growth but with Increasing Fragilities,” sums up this tension in a single phrase. Growth has not collapsed, inflation is coming down, and labour markets in most advanced economies have cooled rather than cracked. But the institutional buffer that cushioned the series of shocks over the past five years—from the pandemic to the energy crisis and wars—is thinner than it looks.

For readers who want to explore the full analysis and projections, the OECD has made the report publicly available: OECD Economic Outlook, Volume 2025 Issue 2: Resilient Growth but with Increasing Fragilities (with a downloadable PDF on the same page).

Three years around 3%: not too hot, not too cold

Compared with the post-pandemic rebound, the new baseline feels subdued. Compared with the more pessimistic scenarios floated in 2022 and early 2023, it feels almost comfortable. The OECD is not forecasting a deep global recession. Instead, it sees the world settling into what might be called a “3% world”: expansion that is good enough to avoid crisis, but too modest to hide structural weaknesses.

In the United States, growth is expected to reach roughly 2% in 2025 before cooling to just under that level in 2026 and 2027. The drag from higher interest rates and tighter financial conditions is being offset, in part, by strong investment in artificial intelligence and digital infrastructure. The euro area’s path is flatter, with growth hovering a little above 1% over the next three years as resilient labour markets and gradually easier credit are balanced by tighter fiscal policy and persistent geopolitical uncertainty.

Asia remains the centre of gravity for global momentum. China is forecast to expand by around 5% in 2025, then slow toward the mid-4% range as temporary fiscal support fades, property-sector weakness lingers and new US tariffs take effect. India continues to stand out as the fastest-growing large economy, with growth rates comfortably above those of the OECD average and a rising share in global output. Taken together, these trajectories imply that the engine of global growth remains firmly eastward, even as advanced economies manage to avoid the cliff edge many had anticipated.

For corporate boards and investors, this is not an environment of boom or bust. It is an environment in which mediocre but predictable top-line demand places a premium on relative performance: who gains market share, who can raise productivity, who is positioned in the right parts of the value chain.

Between an AI investment boom and a tariff shock

One of the most striking aspects of this Outlook is the way artificial intelligence has moved from a speculative theme to a macroeconomic factor. The OECD highlights a visible surge in AI-related investment, particularly in the United States, as firms ramp up spending on data centres, connectivity, software and services. That wave of capital is now large enough to matter at the level of national accounts. It is also one reason why growth in some advanced economies has held up better than expected, even as real interest rates have risen and cyclical supports have faded.

The other side of the coin is trade. The report points to a marked slowdown in global trade growth as new and higher tariffs work their way through supply chains. Trade volumes are expected to grow more slowly in 2026 than in 2025, with the cumulative effect of policy measures in the United States and elsewhere dampening cross-border investment and depressing the appetite for long-term commitments to complex, globalised production networks.

Effective US tariff rates, for example, are now estimated to be at their highest levels since the 1930s. In the short term, many firms have responded by front-loading imports, drawing down inventories or absorbing part of the shock in their margins. Over time, that buffer erodes. As contracts roll over and business models adjust, higher trade costs become harder to disguise.

The result is a two-speed world that is not easily captured by headline GDP. Sectors and firms tied to AI, digital infrastructure and high-value services are pulled along by powerful structural currents: abundant capital, investor enthusiasm and political narratives that frame innovation as a strategic priority. At the same time, trade-exposed industries in more traditional goods markets face a slower, less benign environment marked by fragmentation, redundancy and policy risk. For globally active companies, this divergence is already reshaping decisions about where to invest, where to locate production and how to insure against policy shocks.

Cooling inflation, uncomfortable fiscal arithmetic

The inflation story, for once, is less dramatic than it was a year or two ago. According to the OECD, headline inflation across the G20 is set to glide down from the mid-3% range toward roughly 2½% by 2027, bringing most major economies back within striking distance of central bank targets. The sharpest phase of disinflation is behind us, and the lingering pressures now come mostly from food and services, rather than the energy and goods shocks that dominated the first post-pandemic phase.

Labour markets, too, are softening gradually rather than breaking. Job vacancies have retreated toward pre-pandemic norms, hiring has slowed, and unemployment has ticked up modestly in several economies. That cooling has helped restrain wage growth without triggering a full-scale employment shock, supporting the case for a cautious easing of monetary policy in the months ahead.

Yet the Outlook is careful not to declare victory. The path back to target inflation is no longer linear. A new burst of geopolitical tension, a renewed spike in energy prices, or a second round of wage-price dynamics could all derail the baseline scenario. Central banks, in other words, may be able to cut rates, but they cannot yet relax.

If monetary policy is entering a more flexible phase, fiscal policy is running out of easy options. The OECD devotes a significant portion of its analysis to what might be called the new fiscal arithmetic: public debt that swelled during the pandemic and energy crisis; populations that are ageing rapidly in many advanced economies; pressures to increase defence spending; and the enormous investment needs associated with the green transition and digital infrastructure.

Taken together, these forces push governments into a strategic dilemma. They need to invest more, not less, to secure future growth and resilience—but they need to do so in an environment where debt is already high, interest costs have risen and political tolerance for austerity is low. The report calls for credible medium-term fiscal frameworks that can stabilise debt ratios while preserving room for priority investments. In practice, this is likely to be politically contentious and uneven across countries.

“Resilient but fragile” as a strategic lens

What, then, should boards and investors take away from an Outlook that is neither upbeat enough to celebrate nor dark enough to ignore? The phrase “resilient but fragile” is not simply a rhetorical flourish; it is a useful lens for thinking about risk and opportunity over the next three years.

Resilience, in this context, means that the world economy has absorbed a series of historic shocks without tipping into depression. Financial systems have held, labour markets have adjusted more smoothly than in past crises, and the worst tail risks have not materialised. Fragility, however, lies in the way these achievements have been financed and in how thin some of the buffers have become: through higher public debt, through asset prices that embed very optimistic expectations about technology and earnings, and through a trading system that is increasingly politicised.

For firms operating across borders, this calls for a different calibration of strategy. It is no longer enough to ask whether global growth will be 3% or 3.5%. More relevant questions include: How sensitive is the business model to renewed trade frictions? How exposed are valuations to a change in the narrative around AI or to a repricing of risk in bond markets? How robust are supply chains and revenue streams to fiscal and regulatory shifts that may come not from crisis, but from the slow grind of demographic and political change?

The OECD’s baseline scenario does not forecast a dramatic break with the recent past. It does, however, underline that the margin for error is narrowing. In a “3% world,” where macroeconomic conditions are neither disastrous nor buoyant, differentiation will increasingly come from how clearly firms read these undercurrents—and how early they act on them.