Global | A somewhat more positive balance for the economy

Summary

The outlook for the global economy in the second half of the year is proving more positive than expected around April, when the protectionist shock from the US economy materialized.

Key points

• Key points:
• Growth surprised to the upside in the third quarter across the major regions of the global economy, and the near-term outlook is far from the sharp cooling that had been anticipated at the beginning of the year amid fears over tariffs, immigration restrictions and political uncertainty.
• The precautions taken by the US administration have led to the negotiation of effective tariff rates well below what had been assumed, so global trade has not slowed markedly. Above all, the boom in artificial intelligence (AI) has boosted investment in the US.
• In the US, following the 2% now forecast for 2025, there may be a gentle slowdown over the next two years. The eurozone will end the year with growth of around 1.4% and move toward values closer to its potential in 2026–27 (1.1% and 1.3%, respectively), supported in part by fiscal stimulus measures.
• The recent improvement does not eliminate the sources of instability. AI may start generating productivity gains sooner than expected. However, geopolitical uncertainties persist, and the risk of a less independent Fed could rapidly cause market instability.

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