The Paris-based organization credits massive spending on information technology and artificial intelligence for powering growth and cushioning tariff-related shocks.
By yourNEWS Media Newsroom
The U.S. economy is outperforming its advanced-economy peers in 2025 thanks to record investment in artificial intelligence, information technology, and data infrastructure, according to a new OECD report released Tuesday.
In its latest Economic Outlook, the Organization for Economic Cooperation and Development raised its U.S. growth forecast to 2 percent for 2025, up from 1.6 percent projected in June. The 38-member group said the upgrade reflects exceptional private-sector spending on ICT (information and communication technology), software, and data center construction — which has effectively offset the drag from weaker job growth, slower consumer spending, and the impact of higher tariffs.
“The global economy has been resilient this year, despite concerns about a sharper slowdown in the wake of higher trade barriers and significant policy uncertainty,” OECD Secretary-General Mathias Cormann wrote. He cautioned that tariffs will likely feed through to higher prices over time, weighing on consumption and private investment.
Tech Investment Driving U.S. Outperformance
The OECD said the United States’ strong performance is being driven by a surge in ICT and AI-related investment that has become the central engine of growth. Spending on information-processing equipment and software has soared, with U.S. ICT investment levels now roughly 20 times greater than those of Canada or the United Kingdom.
AI spending in particular has become a defining force in the U.S. expansion. The report found that ICT equipment and software accounted for nearly all of the nation’s GDP growth in the first half of 2025 — growing at a 1.1 percent annualized pace. Without the AI-related boom, U.S. GDP would have slipped by 0.1 percent over the same period.
The data center construction surge has been extraordinary: investment in that sector jumped at an annualized 21 percent pace through mid-2025, accounting for more than 5 percent of all nonresidential construction. Already home to 43 percent of global installed data center capacity in 2024, the United States is further widening its lead as corporations race to deploy AI-driven technologies.
“Strong demand for new AI-related investments in some countries, particularly the United States, are all providing broader support for demand, offsetting headwinds stemming from the gradual implementation of new trade policy barriers,” the OECD said.
Tariffs and Consumption Weigh, But Economy Stays Resilient
While business investment has remained the key growth pillar, consumer spending has cooled noticeably. Higher tariffs have pushed up import prices, and slowing population growth has tempered demand. Still, buoyant equity markets have cushioned households with wealth gains, offsetting weaker wage and job growth.
The OECD noted that a rush of pre-tariff imports earlier in the year temporarily boosted industrial output, keeping supply chains active even as trade barriers climbed. The effective legislated tariff rate in the U.S. has risen from 2.5 percent to 14 percent since January, though the observed tariff rate — measured by customs duties relative to import values — remains closer to 10 percent, suggesting much of the shock is still unfolding.
So far, the report said, companies have absorbed much of the tariff burden, muting its pass-through to consumer prices. However, import volumes of tariffed goods have “fallen significantly,” and analysts expect a lagged drag on activity heading into 2026.
Fiscal and Financial Risks Persist
Despite new tariff revenues and reductions in discretionary spending, the OECD described the federal fiscal stance as “unsustainable.” The U.S. deficit is projected to hover near 7.5 percent of GDP through 2026, driven by outlays from the One Big Beautiful Bill Act and slower overall growth.
The organization expects the Federal Reserve to resume rate cuts in 2026 as inflation pressures stabilize and labor-market risks rise. It forecasts the federal funds rate will decline to a range of 3.25–3.5 percent by late 2026, assuming inflation continues to ease.
Downside risks include a potential equity-market correction — given elevated valuations tied to AI investment — and tighter credit conditions in the shadow-banking sector. On the upside, continued innovation in AI, stronger manufacturing onshoring, or a rebound in consumer demand could push growth higher.
Global Outlook
Globally, the OECD projects economic growth of 3.2 percent in 2025, slightly slower than 2024’s 3.3 percent pace but stronger than the 2.9 percent forecast six months ago. Growth is expected to slow to 2.9 percent in 2026 as tariffs and tighter monetary policy take hold.
For the United States, the OECD anticipates growth of 2 percent in 2025, 1.7 percent in 2026, and 1.9 percent in 2027 — signaling a soft landing powered by America’s continuing dominance in artificial intelligence, technology infrastructure, and high-value innovation.
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