Economic Forecast for Summer 2025 on a Global Scale
In the latest edition of the National Institute Global Economic Outlook, No. 19, Vol. Series B, published this summer, a group of esteemed economists have issued a grim forecast for the global economy. The article, authored by Dr. Ahmet Ihsan Kaya, Monica George Michail, Barry Naisbitt, Shama Bernard, Ed Cornforth, Lea De Greef, Dr. Ian Hurst, Iana Liadze, Patricia Sánchez Juanino, and Professor Stephen Millard, predicts a noticeable fall in global GDP growth in the coming years.
The slowdown in global economic growth is attributed to President Trump's tariff policies, which are expected to adversely affect the economies of the United States, Canada, and Mexico. The outlook for these regions is particularly concerning, with the US GDP growth forecasted to slow markedly from 2.8% in 2024 to 1.6% this year.
The article also highlights that US inflation is expected to remain elevated, primarily due to the pass-through from higher import tariffs and depreciation of the US dollar. This could potentially lead to a significant increase in the cost of living for many Americans.
Furthermore, the economists warn of the possibility of further tariff increases as a downside risk to the forecast. Such an escalation could deepen the economic slowdown and lead to even more significant consequences for the global economy.
Interestingly, headline inflation rates have fallen towards target rates in most advanced economies, but the new tariffs threaten to reverse this trend. Despite historically high levels of public debt, budget deficits are likely to remain high in advanced economies due to the need for stimulus measures to support economic recovery.
It's important to note that the content of this article is restricted to corporate members, NiGEM subscribers, and NIESR partners. The outlook for the global economy, as presented in the National Institute Global Economic Outlook, No. 19, Vol. Series B, is a sobering reminder of the potential impacts of protectionist policies on the global economy.
In conclusion, the global economy is expected to grow by 3% this year, one of the weakest growth rates since the Global Financial Crisis in 2009, excluding the pandemic-hit year of 2020. The economists urge policymakers to consider the potential long-term consequences of their actions and to work towards fostering a more open and cooperative global economic environment.
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