Home > World Economic Prospects

World Economic Prospects

Each month Oxford Economics’ team of 300 economists updates our baseline forecast for 200 countries using our Global Economic Model, the only fully integrated economic forecasting framework of its kind. Below is a summary of our analysis on the latest economic developments, and headline forecasts. To access the full report (and much more), request a free trial today.

Request a free trial

Small growth revisions mask deeper tectonic shifts

• The news that Donald Trump will be the next US president and the Republicans will likely gain full control of Congress has huge ramifications for the global economy. While we’ve made some relatively small top-level adjustments to our global GDP and main macro forecasts, these shifts significantly underplay the implications at a sectoral level and for financial markets.
• The prospect of more fiscal stimulus in the US alongside earlier news that China will step up fiscal support imply slightly better global growth over the next year or two. Compared to a month ago, we’ve revised up our US GDP growth forecast for 2025 by 0.1ppts to 2.6% and expect a further bout of healthy growth over the following two years. Our China growth forecasts for 2025 and to a lesser extent 2026 have also edged higher. But these shifts only generate a very small uptick in our global growth forecasts (Chart 1).
• As the positive effect of looser policy on economic activity wanes, negative impacts will build from gradually rising US import tariffs, a slower return of the US policy rate towards neutral and, in the case of the US, lower migration. In the medium term, we expect a Trump presidency to result in a slightly lower path for global GDP compared to our forecasts a month ago.
• For now, our forecasts assume that Trump opts for targeted rather than blanket tariffs, which limits the macro-level spillovers. In addition, the impact of tariff increases is partially offset by some reorientation of trade flows, along with a weakening of the affected economies’ exchange rates against the dollar.
• Trump’s favourable disposition towards tariffs suggests bigger, broader, and thus more damaging, rises could happen. But a key lesson from the election is that the associated rise in domestic prices would likely go down very badly with voters, favouring more selective use of tariffs. Another key concern is that uncertainty over the path for US tariffs and any retaliatory measures could lead firms to scale back investment decisions and hiring intentions, adding to the longer-term negative impacts. We will revisit these uncertainties in our second November release.

Find out how Oxford Economics can help you

Talk to us