OECD

OECD Growth Slows Sharply in Q1 2025 as U.S. and Japan Record GDP Contractions

Paris, May 2025 — Economic growth across the OECD area took a noticeable downturn in the first quarter of 2025, signaling a shift from the higher and relatively stable rates seen over the past two years. According to newly released data, 17 of the 28 OECD economies for which data is available experienced a slowdown in GDP growth compared to the final quarter of 2024, while seven countries saw outright contractions.

This marked a significant departure from recent economic resilience in the region. The downturn was particularly notable in major economies like the United States and Japan, both of which recorded GDP contractions in Q1.

In Japan, GDP shrank by 0.2% after growing 0.6% in Q4 2024. Similarly, the United States saw a 0.1% contraction, down from a 0.6% growth rate the previous quarter. In the U.S., a surge in goods imports—up 10.8%—weighed heavily on growth, with economists pointing to expectations around upcoming changes to trade #tariffs as a potential driver behind the increase in foreign purchases.

The OECD (Organisation for Economic Co-operation and Development) shared a graphic illustrating the broad-based slowdown across member states, highlighting the extent of the cooling momentum. Analysts suggest that a combination of weakening global demand, tightening financial conditions, and policy uncertainty may be contributing to the broader deceleration.

As global markets digest the latest figures, attention now turns to central banks and policymakers, who may face increasing pressure to support economic activity amid signs of stalling momentum.