The OECD forecasts slower growth and higher inflation in the US in the Trump era.

If the intention was to "make America great again," Donald Trump's plan could have backfired. Data from the Organization for Economic Cooperation and Development (OECD) suggests just the opposite. If there is a Trump effect, it will hurt the US economy rather than help it.

In its half-yearly forecast report presented on Tuesday, this multilateral organization notes that, compared to the situation during the last year of Joe Biden's presidency, Uncle Sam is losing steam. Growth will drop from 2.8% (2024) to 1.8% this year and drop a further notch to 1.5% in 2026.

Spanish GDP benefits from consumption, immigration and tourism

Regarding prices—one of the factors that supposedly penalized the Democratic candidate—inflation will rise from 2.5% in 2024 to 2.7% this year and 3% in 2026.

Less dynamism and higher prices. A combination explained by tariffs. Or rather, by their effect, which "we have not yet fully seen," as the report argues. So far, the US economy has not been overly disrupted by the impact of tariff barriers because, the OECD explains, many importers brought forward their purchases and some absorbed the extra costs in their margins.

But this resilience appears to be temporary, because, as OECD Secretary-General Mathias Cormann points out, "with protectionism, there are no winners." The Paris-based institution estimates that at the end of August, tariffs on goods arriving in the US reached 19.5%. The highest level since the mid-1930s. It's impossible for this not to have consequences.

In fact, the results of the World Economic Forum's macro survey of chief economists were also released yesterday: "72% of respondents expect the global economy to weaken over the next year, amid intensifying trade disruptions, rising political uncertainty, and accelerating technological change. The results point to the emergence of a new economic environment defined by persistent disruption and increasing fragmentation."

So why has the US economy held up relatively well so far? The OECD also provides an explanation: the tech boom. Sustained by the pull of artificial intelligence, the US has managed to attract capital flows far above the rest. Since 2014, investment in the US has increased by 50%. Investment in software and data alone has increased by 150%, three times more than in Europe over the same period.

But this financial success also carries with it a considerable danger, one that weighs heavily on the US and not just the US: that of a bubble. "Potential risks to financial stability have intensified given the evident overvaluation in several asset markets. Equities are highly valued, based on price-earnings ratios, requiring sustained and robust earnings growth to justify current prices, particularly for technology stocks." This is a warning to bear in mind, given that crypto assets reached a record market capitalization of $3.9 trillion in September, almost five times their value in January 2023.

In this turbulent environment, the OECD has raised its growth forecast for Spain for 2025 by two-tenths of a percentage point, to 2.6%, slightly below the government's estimate of 2.7%. For 2026, the multilateral organization has adjusted its projection upward by one-tenth of a percentage point, bringing it to 2%.

Thus, Spain will once again lead growth among advanced economies in 2025, despite the context of geopolitical and trade uncertainty. The 2.6% forecast for Spanish GDP is three times higher than the estimate for the eurozone as a whole.

"GDP growth will continue to be driven by significant dynamism in consumption and investment. At the same time, employment growth is expected to continue to be compatible with increases in productivity," said Economy Minister Carlos Cuerpo.

OECD Chief Economist Álvaro Pereira highlighted the three driving forces behind Spain's economy: consumption, tourism, and immigration. The report also highlights some weaknesses, such as the debt burden and low productivity. "It is essential to maintain fiscal discipline to bring debt to levels that allow us to cope with a shock in Europe or other countries around the world," said Pereira. For example, when the impact of tariffs arrives...