NZAC - Global Economic Outlook: March 2025

2025-03-20 02:50:00 ET

Summary

• The proliferation of tariffs and related uncertainties raise the risk of a global hard landing.
• Fiscal developments in Germany are a rare bright spot for eurozone growth prospects.
• Amid more volatile ?nancial market conditions, the US dollar’s depreciation likely has further to go.

The proliferation of tariffs and related uncertainties raise the risk of a global hard landing. Measures of trade policy-related uncertainty have continued to soar to unprecedented heights while business surveys, including S&P Global’s Purchasing Managers Indices™ (PMIs®), now also show a loss of global growth momentum. Our global real GDP growth projection for 2025 has been cut to 2.5% in our March forecast round. This would be the weakest outcome since 2009, outside of the COVID-19 shock. A marginal pick-up in global growth is forecast in 2026, to 2.7%, re?ecting a boost from additional ?scal stimulus in Europe. The risks to both years' forecasts increasingly look to be on the downside, absent a major shift in the US administration’s policy approach....

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