MR. NEWS – Economy News

The global economy in September 2025 is weathering a period of transformation and uncertainty. Although growth has proven more resilient than expected, heightened trade tensions, President Donald Trump’s tariff campaigns, and rapid technological change are reshaping prospects for both developed and emerging markets.

Global Resilience Amid Policy Shifts

The world’s leading economists report that global GDP growth is holding firm at about 3.2% in 2025, only marginally below last year’s rate. While this modest momentum is an improvement over the dire forecasts made earlier in the year, concerns linger about the impact of rising production costs, fractured supply chains, and unpredictable policy changes. Industrial production and trade benefited from “frontloading” ahead of new US tariffs, cushioning the worst effects for now. However, the OECD warns that these supports will fade as inventory boosts wear off and new trade barriers bite—potentially dragging 2026 growth down to 2.9%.

The United States: Mixed Signals

In the US, the economy defied predictions of stagnation after the return of President Trump, expanding at a brisk 3.8% in the second quarter. This remarkable pace resulted from surging consumer spending and a rush to import goods ahead of anticipated tariffs, which materially boosted GDP. However, the outlook for the second half of 2025 is far less exuberant: growth is forecasted to cool to just 1.5% annualized in Q3 as tariff impacts ripple through supply chains and immigration slows. While consumer spending remains robust, economists warn the effects are increasingly uneven, with lower-income Americans feeling the pinch even as affluent households fuel growth.

The labor market, though resilient, is showing signs of strain as job growth slows. The Federal Reserve responded with its first interest rate cut since December, aiming to preempt a downturn. Still, the robust Q2 GDP data complicates policymakers’ approach, with less urgency for aggressive rate reductions.

Europe and China: Divergent Paths

Europe’s economy, battered by trade tensions and inflation, continues to exhibit “fragile but improving” growth. The eurozone’s expansion is expected to slow, with projections hovering near 1% for 2026 as policy uncertainty weighs on investment. The European Central Bank’s rate cuts have offered some support, but the effect of global realignment in trade—especially following US tariff hikes—is still reverberating.

China confronts deflationary pressures and a sharp slowdown. The country has frontloaded exports to beat US tariffs, temporarily propping up growth, but as these supports fade, China’s GDP is expected to decelerate to around 4.9% for 2025—down sharply from the pre-pandemic average.

Emerging Markets and Structural Change

Emerging regions, especially Sub-Saharan Africa and the Middle East, project stronger momentum as local consumption and investment rebound. Meanwhile, fiscal imbalances and rapid advances in artificial intelligence are driving long-term structural change across economies worldwide.

AI-led innovation in the equity markets and digital sectors is not seen as a speculative bubble, but as a “boom underpinned by fundamentals,” according to leading chief economists. The real test for policymakers now is supporting the resilience of these sectors while mitigating risks in traditional industries under pressure from trade and policy uncertainty.

A New Global Order

The September 2025 consensus from chief economists and institutional reports indicates a world economy in flux—adapting to new trade alignments, realigned fiscal priorities, and the rise of AI. With risks still high but resilience evident, businesses and governments are urged to develop adaptive strategies to navigate short-term volatility and capitalize on evolving opportunities.

The coming months will be critical. As inventory supports wane and trade barriers rise, the agility of policymakers and businesses will determine whether recent global resilience translates to lasting recovery or a return to slower trend growth.