Global growth has remained resilient despite challenges: OECD’s Mathias Cormann

The world would benefit from a sustained resolution of trade tensions, says Mathias Cormann, secretary general of Organisation for Economic Cooperation and Development. In an interview with Deepshikha Sikarwar, Cormann said countries should work bilaterally and multilaterally to strengthen international trading arrangements while preserving the benefits of open markets and rules-based trade. He backed a coherent framework for AI grounded in shared principles that makes it human-centric, safe, responsible and trustworthy, while still supporting innovation and progress. Edited excerpts:

The global economy appears to be stabilising but at a low growth trajectory. What's your assessment?

Global growth has remained resilient despite significant challenges over the past five to 10 years. Growth is running below long-term trend, but it has held around 3%. Last year, it was about 3.2%. This year, we are looking at roughly 2.9%, so slightly softer, followed by a modest pickup to just above 3% next year. The key takeaway is that the global economy has proven remarkably resilient. We have faced major shocks-Covid-19, the economic and fiscal fallout from Russia's war against Ukraine, higher energy prices, inflation, trade tensions and elevated policy uncertainty. Despite all of that, global growth has continued at a steady pace.


How serious is the risk of geoeconomic fragmentation? Are we already seeing measurable costs to global GDP?

The world would benefit from a sustained resolution of trade tensions. Countries should work bilaterally and multilaterally to strengthen international trading arrangements while preserving the benefits of open markets and rules-based trade. Increased fragmentation carries risks. The best way to strengthen supply chains is diversification-of both supply sources and markets. A well-functioning global market delivers better outcomes than a fragmented one.

Can AI meaningfully lift global growth or are we overestimating its near-term impact?

AI certainly has the potential to drive stronger growth. We believe that widespread adoption could lift productivity growth by up to 1 percentage point annually over the next decade across the G20. That would directly strengthen overall growth momentum. That said, AI is evolving very rapidly. Innovation is accelerating, and policymakers are constantly trying to keep pace.

Is there a need for a global framework? Is regulatory fragmentation a risk if countries take different approaches?

International cooperation is essential. The Global Partnership on AI, for example, has been meeting alongside this AI Impact Summit here in Delhi. AI offers enormous opportunities, but it also carries risks and potential disruptions if not properly governed. If countries pursue very different regulatory approaches, fragmentation could create inefficiencies, gaps, regulatory arbitrage and unintended consequences.

We need interoperability-a coherent framework grounded in shared principles that make AI human-centric, safe, responsible and trustworthy, while still supporting innovation and progress.

How do we ensure AI does not widen the gap between richer and poorer nations?

AI is a general-purpose technology. Ensuring broad access is critical. That requires investment in infrastructure, skills development and capacity building so people everywhere can benefit. That is precisely why forums like these (India AI Impact Summit) are important to align policy settings in a way that promotes inclusion rather than deepening divides.

How do you assess progress since the 2021 global tax deal?

Over the past decade and a half, significant progress has been made in modernising international tax rules for a globalised and digitalised economy. We now have greater transparency through information exchange, stronger anti-avoidance measures, and the global minimum tax is a reality. All of this forms part of a continuum aimed at ensuring businesses pay their fair share while maintaining certainty that supports investment and growth.

How does uneven implementation affect the global minimum tax architecture?

No country has formally withdrawn. The global minimum tax is now in place. A growing number of countries have legislated or are in the process of doing so. The United States has had global minimum tax features in place since 2017.

The 147 members of the Inclusive Framework on Base Erosion and Profit Shifting have agreed to a side-by-side arrangement to ensure effective minimum tax outcomes.

Is the side-by-side arrangement a political necessity? Does it not compromise the principle of having a framework on a global minimum tax?

Multilateralism is about being ambitious, getting the best possible outcome, but also being pragmatic and making the necessary compromises in order to get an outcome. US businesses are subject to key features of the global minimum tax, such as the domestic top up tax arrangements and 15% global minimum tax. There are some aspects that are covered under the US system and the modalities of all of that have been agreed by all members. In the end, if you want to reach consensus across 147 countries, all with different interests and perspectives, all legitimate from their own point of view, then you need to have some compromises along the way. And, that's what's happened here.

Critics say accommodating US concerns has weakened the credibility of the agreement.

What's the alternative? The alternative is no agreement at all. There is value in having an agreed arrangement. It stabilises the international tax system. It provides an increased level of certainty, and that's good for investment and for business. That's what the agreement is designed to help achieve. We want to avoid double taxation, we want to avoid no taxation, we want to make sure that the system is fair, as fair as possible.

What about digital taxation-where do discussions stand?

That remains under discussion. I hope consensus can be reached.

India remains one of the fastest growing major economies. What is your assessment and what are top structural reforms that the country should prioritise to sustain high growth?

India has been growing very strongly and is expected to continue doing so. There remains substantial domestic growth potential, alongside India's growing importance in the global economy. India is navigating geopolitical and geoeconomic shifts quite effectively. There is still scope for further domestic reforms. Fully leveraging the opportunities from AI would be significant. Maintaining strong integration with global markets is also critical. India should continue focusing on international competitiveness and identifying areas of comparative advantage in the global economy.

What role do you see for multilateral organisations like yours when countries decide to not fully adhere to multilateral rules?

Multilateralism is an ultra-marathon, not a sprint. Aligning the interests of many countries takes time, dialogue and compromise. But multilateral cooperation is as important as ever, perhaps even more so, given today's challenges and the need to responsibly harness opportunities like AI.