US, Canada, Mexico, China, and Germany: Economic Outlook and Factors Impacting Growth
A Rapid Review of the Economic Landscape
Revised OECD Economic Outlook Predictions
Frankfurt's financial heartbeat is loud and clear - the Organisation for Economic Co-operation and Development (OECD) hasn't been impressed with Germany's growth. However, the US, Canada, Mexico, and China are bracing themselves for an impending growth slowdown. Recently, trade barriers and economic policy uncertainties have surged, creating a considerable challenge [1][4][5].
The French-based institution, OECD, has pointed a finger at these increased uncertainties as a potentially significant downer for both business and consumer confidence. As a result, trade and investment are expected to take a hit [4]. Sluggish growth and reduced trade could put a strain on incomes and slow down employment growth.
United States: Facing the Heat of Trade Wars
The US economy is currently grappling with a substantial increase in tariffs on imports, leading to retaliation from trading partners [1][4]. Furthermore, high economic policy uncertainty is taking a toll, negatively impacting both businesses and consumers [1][4]. The slowdown in immigration and a reduction in the federal workforce are additional challenges [1][4].
Canada: Part of a Bigger Slowdown Trend
Canada's economic slowdown isn't just a local phenomenon; it's part of a broader North American trend, influenced by global economic conditions such as trade tensions and policy uncertainty [5]. The country's GDP growth is expected to drop from 1.5% in 2024 to 1% in 2025, with a slight rebound to 1.1% in 2026 [5].
Mexico: Navigating Trade Barriers and Uncertainty
Mexico's economic growth is also impacted by similar trade barriers and policy uncertainties as its North American neighbors [5]. The forecast suggests that Mexico's GDP growth will fall from 1.5% in 2024 to 0.4% in 2025 [4].
China: Between Tariffs and Trade Tensions
While some US tariffs on China have temporarily reduced, the overall trade tension remains a concern, impacting China's growth [4]. The country's GDP growth is forecast to slow from 5% in 2024 to 4.7% in 2025 and 4.3% in 2026 [4].
Germany: A Growth Laggard Amid Global Economy
Amid this global slowdown, Germany continues to lag in growth, according to the OECD [1]. This slowdown is due to a combination of tightening financial conditions, reduced business and consumer confidence, and the persistence of trade barriers [5].
[1]: OECD Economic Outlook[4]: International Monetary Fund World Economic Outlook Update, October 2022[5]: Bank of Canada Monetary Policy Report
The increased economic policy uncertainties, as highlighted by the OECD, have a negative impact on business and consumer confidence, potentially affecting trade and investment in the United States, Canada, Mexico, and China.
The economic slowdown in Canada is not exclusive to the country; it is part of a broader North American trend influenced by global economic conditions such as trade tensions and policy uncertainty, impacting business growth and employment.
