The global economy showed resilience in H1 2025, supported by improved financial conditions, lower energy prices and front-loading exports. However, rising US tariffs and persistent uncertainty are set to constrain growth going forward. Global real GDP growth is forecast to stay at 2.9% in 2025 and 2026, down from 3.3% in 2024. Trade tensions, policy risks and inflationary shifts weigh on outlooks for both advanced and developing economies.
Delivery
This report comes in PPT.
Key findings
Global economy shows resilience in H1 2025, but set to weaken on higher US tariffs and ongoing uncertainty
The global economy began adapting to a shifting trade landscape and demonstrated resilience in the first half of 2025, supported by improved financial conditions, lower energy prices and robust export performance in Asia and Europe. However, higher US tariffs and persistent uncertainty are expected to constrain global growth. In Euromonitor’s Q3 baseline forecasts, the global real GDP growth rate is expected to stay at 2.9% in 2025 and 2026, down from 3.3% in 2024. The outlook is dominated by downside risks, as trade tensions persist, risking a further decline in investment and consumption.
Outlook for both advanced and developing economies remains below 2024 levels
Growth prospects for both advanced and developing economies are projected to worsen in 2025 and 2026, driven by rising global trade barriers, persisting policy uncertainty and geopolitical tensions. In the US, economic momentum has slowed amid cooling demand, higher tariffs and uncertain policy environment. Meanwhile, Asia Pacific and Europe saw a temporary boost in exports to the US in H1 2025 as firms front-loaded shipments ahead of anticipated tariff hikes. However, this surge is expected to fade, potentially dampening activity in the coming quarters.
Global inflation eases further, but increasing trade protectionism remains an upside risk
Global consumer price inflation is forecast to decline further to 4.1% in 2025 and 3.5% in 2026, given lower energy prices and slowing economic activity. The US is forecast to see elevated inflation in 2025 as the US dollar weakens, and high import duties are passed through to consumers. Inflationary pressures, on the other hand, ease in tariffed countries in the near term as demand slows down. However, rising trade protectionism and the relocation of production continue to pose challenges to the global inflation outlook over the medium and long term.
Global growth to be hit by uncertainty and rising trade barriers
Key findings
Key country insights
Global growth outlook: H1 lifted by tariff pause, yet fresh hikes dampen the momentum
Global inflation outlook: Downward trend continues but higher tariffs remain a key risk
Trade uncertainty and geopolitical tensions remain top downside risks
Real GDP annual growth forecasts and revisions from last quarter - AE
Real GDP annual growth forecasts and revisions from last quarter - EMDE
Inflation forecasts
Central bank interest rates quarterly forecasts
Global scenario map: Trade-related uncertainty dominates the risk landscape
Global Risk Index scores and rankings
Trump Total Agenda scenario: Policy-induced recession risk for the global economy
Trump Tariff Easing scenario: Tariff rollback and policy stability can revive confidence
US: Growth outlook dims due to rising trade barriers and uncertainty
US: Inflation persists on tariff pass-through impact and a weakening dollar
US: Ongoing uncertainty weighs on business and consumer sentiment
US: Trade war and fiscal policy pose key risks to growth
China: Growth to lose steam in H2 as front-loading may run its course
China: Trade tensions and income concern dampen business and consumer sentiment
China: Outlook highly vulnerable to the risk of escalated trade war with the US
India: Solid growth driven by tax cuts, production expansion, and monetary easing
India: US tariff and commodity price hike are key risks
Japan: Muted recovery amid tariffs, inflation and demographic strain
Japan: US trade agenda and China economic slowdown represent two key risks
Indonesia: Growth to slightly decelerate, higher US tariffs add pressures
Eurozone: Limited growth amid higher US tariffs and uncertainty
Eurozone: Inflation moderates but trade uncertainty can increase volatility
Eurozone: Trade challenges partly offset by decreasing commodity prices
UK: Growth stagnates, while elevated inflation expected to ease by year end
UK: Tariff risk eases while remaining vulnerable for global demand shifts
Russia: Growth to decelerate on lower commodity prices and international sanctions
Brazil: Growth to slow down on weaker external demand and potential US tariff hike
Brazil: Outlook threatened by export uncertainty and domestic risks
Mexico: Economy faces recession risk amid higher US tariffs and trade tension
Baseline and alternative scenarios : Q3 2025
Alternative scenarios (continued): Q3 2025
Alternative scenarios (continued): Q3 2025
Global Economic Forecasts reports: Helping businesses prepare for economic shifts
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