Global Economy: AI tailwinds lift growth

• The United States Federal Open Market Committee (US FOMC) lowered the target range for the federal funds rate by 25 basis points (bps) for the third straight meeting in December, to 3.5-3.75%
• The Eurozone’s real gross domestic product grew 0.3% on-quarter (seasonally adjusted) in the third quarter of 2025, compared with 0.1% in the previous quarter
• In China, inflation based on the Consumer Price Index (CPI) rose to 0.7% in November, the highest level since February 2024, from 0.2% in October, driven by food inflation

In November, S&P Global raised its 2025 global gross domestic product (GDP) growth forecast by 10 bps from its September update to 3.2%, citing tailwinds from US-led artificial intelligence (AI) investments and lower-than-expected US tariffs. While this represents a slight slowdown from 3.3% in 2024, it is well above the 2.8% forecast made last November.

Among the major global economies, growth forecast was raised 10 bps for the US (to 2%) and 20 bps for China (to 4.8%), the United Kingdom (UK; to 1.4%), the Eurozone (to 1.3%) and Japan (to 1.3%).

In 2026, S&P Global expects global growth to hold steady at 3.2%.