Global Economy: Uncertain vibes

S&P Global forecasts the United States (US) economy will lose momentum in the second half of the calendar year, with growth slowing and unemployment rising. While a recession is not expected in the near term, the risk is higher because of uncertainties surrounding US trade policies, immigration and spending. Ongoing concerns have increased the likelihood of a recession in the next 12 months. The One Big Beautiful Bill Act has led to fears about the sustainability of US fiscal policy. 

On the tariff front, US President Donald Trump announced a 25% tariff on imports from India starting August 7 and another 25% effective August 27 if India continued buying crude oil from Russia. Some other Asian countries are to face 15-20% tariffs. 

These developments have led to a significant increase in global uncertainty, with the World Uncertainty Index nearly doubling sequentially in the second quarter of calendar year 2025 and increasing five-fold on-year. The heightened uncertainty is likely to have a negative impact on the global economy in 2025. S&P Global expects global growth to decelerate to 2.9% in 2025 from 3.3% in 2024.

• The United States economy made a significant turnaround in the second quarter of calendar year 2025, with gross domestic product growing 3%
• Global supply chain activity remained subdued in July with the United States leading the decline, according to the GEP Global Supply Chain Volatility Index
• Brent crude prices dropped as investors expected trade policies to dampen global economic growth and as higher output led to a surplus