Economists Predict that Changes in US Policy Could Affect Global Growth
Economists are suggesting that modifications to U.S. policies are expected to have significant effects on global economic growth.
TroibNews 
Economists from international economic organizations and financial institutions have expressed concerns about the potential risks to the global economy stemming from the forthcoming US government transition.
The anticipated fiscal and trade policies articulated by US President-elect Donald Trump have contributed to increased uncertainty regarding next year's interest rate strategies. The market widely believes that this will impede the rate cut process, as reported by Singaporean newspaper Lianhe Zaobao.
In a recent outlook note, Morgan Stanley economists suggested that the transition of power in Washington, coupled with expectations of a hawkish trade stance, is likely to impact consumer spending in the years ahead.
"The outcome of the US election is going to usher in policy changes with implications that will reverberate through the global economy," stated Morgan Stanley's Chief Global Economist Seth Carpenter.
He noted that the initial round of tariffs from the incoming administration will primarily target imports from China, with a gradual broadening to include goods from other nations. As sellers shift increased costs onto consumers through price hikes, inflation is expected to rise in the latter half of 2025, potentially leading to decreased consumer spending, which would in turn affect production and employment.
Goldman Sachs Research recently projected that the average annual global GDP growth rate for 2025 will be 2.7 percent, slightly atop the consensus forecast from economists surveyed by Bloomberg.
Although there is some optimism surrounding global economic growth, primarily attributed to a reduction in inflation over the past two years, US trade policies could pose challenges for other regions, warned Goldman Sachs Chief Economist Jan Hatzius.
"The biggest risk is a large across-the-board tariff, which would likely hit growth hard," Hatzius remarked.
The Asian Development Bank's outlook report, released last Wednesday, maintained its growth forecast for China but revised down its expectations for developing economies in the Asia-Pacific region.
Despite strong development momentum in the area, the imminent presidency of Donald Trump and potential shifts in US trade, fiscal, and immigration policies could hinder progress in the Asia-Pacific and exacerbate inflation, the report indicated.
Additionally, the Organization for Economic Co-operation and Development has identified the rise of trade protectionism and escalating tensions in the Middle East as substantial downside risks to the global economic projection.
In its latest outlook from December, the OECD projected a US economic growth rate of 2.8 percent in 2024, followed by a decrease to 2.4 percent in 2025, and further cooling to 2.1 percent in 2026. It emphasized factors such as declining immigration, personal consumption, and risks associated with escalating trade conflicts with other nations.
Max Fischer for TROIB News
The anticipated fiscal and trade policies articulated by US President-elect Donald Trump have contributed to increased uncertainty regarding next year's interest rate strategies. The market widely believes that this will impede the rate cut process, as reported by Singaporean newspaper Lianhe Zaobao.
In a recent outlook note, Morgan Stanley economists suggested that the transition of power in Washington, coupled with expectations of a hawkish trade stance, is likely to impact consumer spending in the years ahead.
"The outcome of the US election is going to usher in policy changes with implications that will reverberate through the global economy," stated Morgan Stanley's Chief Global Economist Seth Carpenter.
He noted that the initial round of tariffs from the incoming administration will primarily target imports from China, with a gradual broadening to include goods from other nations. As sellers shift increased costs onto consumers through price hikes, inflation is expected to rise in the latter half of 2025, potentially leading to decreased consumer spending, which would in turn affect production and employment.
Goldman Sachs Research recently projected that the average annual global GDP growth rate for 2025 will be 2.7 percent, slightly atop the consensus forecast from economists surveyed by Bloomberg.
Although there is some optimism surrounding global economic growth, primarily attributed to a reduction in inflation over the past two years, US trade policies could pose challenges for other regions, warned Goldman Sachs Chief Economist Jan Hatzius.
"The biggest risk is a large across-the-board tariff, which would likely hit growth hard," Hatzius remarked.
The Asian Development Bank's outlook report, released last Wednesday, maintained its growth forecast for China but revised down its expectations for developing economies in the Asia-Pacific region.
Despite strong development momentum in the area, the imminent presidency of Donald Trump and potential shifts in US trade, fiscal, and immigration policies could hinder progress in the Asia-Pacific and exacerbate inflation, the report indicated.
Additionally, the Organization for Economic Co-operation and Development has identified the rise of trade protectionism and escalating tensions in the Middle East as substantial downside risks to the global economic projection.
In its latest outlook from December, the OECD projected a US economic growth rate of 2.8 percent in 2024, followed by a decrease to 2.4 percent in 2025, and further cooling to 2.1 percent in 2026. It emphasized factors such as declining immigration, personal consumption, and risks associated with escalating trade conflicts with other nations.
Max Fischer for TROIB News
