Canada's economy will be one of the most hurt by global downturn

A new report warns Canada of a grim future, predicting that our economy will be hit the hardest by a global economic slowdown.

The Organization for Economic Co-operation and Development (OECD) released the first issue of its 2025 economic outlook, and the forecast didn't look so good for countries embroiled in a trade war with the United States.

The economic outlook projects global growth slowing from 3.3 per cent in 2024 to 2.9 per cent in both 2025 and 2026.

It notes that the slowdown is expected to be most pronounced in the U.S., Canada, Mexico and China.

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"The global outlook is becoming increasingly challenging," reads the report. "Substantial increases in trade barriers, tighter financial conditions, weakened business and consumer confidence, and elevated policy uncertainty all pose significant risks to growth."

The OECD shared a list of G20 economies' real GDP growth for 2024 and projections for 2025 and 2026.

Canada's economy grew 1.5 per cent in 2024, and that’s expected to go down to one per cent this year and increase slightly in 2026 to 1.1 per cent.

It's in the 11th spot on the list, on par with projections for Korea and ranking slightly lower than the U.S. Meanwhile, India, Indonesia and China make up the top three G20 countries for GDP growth.

"Inflationary pressures have resurfaced in some economies," states the report. "Higher trade costs in countries raising tariffs are expected to push inflation up further, although the impact will be partially offset by weaker commodity prices."

Canadians have been feeling the pinch since the tariff dispute between the U.S. and Canada began.

Major grocers, such as Loblaws, have warned shoppers in Canada that prices are set to rise on thousands of essential items due to tariffs.

Real estate sales have declined in some provinces as the cost of living pressures continue to weigh on the minds of Canadian homebuyers.

"Governments need to engage with each other to address any issues in the global trading system positively and constructively through dialogue – keeping markets open and preserving the economic benefits of rules-based global trade for competition, innovation, productivity, efficiency and ultimately growth," said OECD Secretary-General Mathias Cormann in a statement.

Ontario expected to fall into recession this year as a result of U.S. tariffshttps://t.co/ochVFdJpOH

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The report highlights the risks that could intensify the growth slowdown and "trigger significant disruptions in cross-border supply chains." That includes more tariff hikes and retaliatory actions, persistent inflation and higher debt payments.

The OECD says that a reversal of these new trade barriers would boost global growth and reduce inflation.