Global Economy: Silver linings

Tariffs imposed by the US on several major global economies came into force in August. India is now dealing with a tariff of 50%, while Bangladesh, Vietnam, Taiwan and South Korea have levies under 20%.

As a result of this and other factors, the global economic situation remains hazy. In August, the gross domestic product (GDP)-weighted World Uncertainty Index surged 10% from July, a ~3.8x rise from pre-pandemic levels. Given that, S&P Global expects the global economy to grow 2.9% this year, slower than 3.3% in the previous year.

Key economies have turned in a mixed performance in the second quarter. While the pace of growth accelerated in the US (annualized 3.3% vs -0.5%) and Japan (annualized 2.2% vs 0.3%), it softened in the eurozone (0.1% vs 0.6%), the United Kingdom (UK; 0.3% vs 0.7%) and China (5.2% vs 5.4%).

• Real gross domestic product growth in the United States (US) was revised up to 3.3% in the second quarter of calendar 2025 (advance estimate of 3%), compared with -0.5% in the previous quarter. The labor market, however, weakened 
• The US Federal Reserve cut rates for the first time in nine months in September 
• Purchasing Managers' Index (PMI) data showed China’s manufacturing sector expanded in August, with the S&P Global RatingDog China General Manufacturing PMI rising above the threshold of 50