U.S. policy unpredictability, led by tariffs, continues to cloud the global macro picture, according to S&P Global Ratings’ report titled “Global Economic Outlook Q3 2025: Unpredictable U.S. Policy Clouds Global Growth Prospects.” The report says that activity is generally holding up: consumption remains firm and labor markets remain tight. Market volatility has fallen as tariffs have been partially paused, but government bond yields have risen, mainly on debt worries; many central banks continue to gradually ease policy rates.

“Our growth numbers are broadly unchanged from our last quarterly update, although policy unpredictability implies unusually wide confidence bands,” Paul Gruenwald, global chief economist at S&P Global Ratings, said.

World GDP growth rate for both 2025 and 2026 is 30 basis points higher than we previously estimated, at 2.9%.

In the advanced economies, S&P reports slightly higher growth in the U.S. this year (at 1.7%) as tariff-related impacts look lower than previously. Elsewhere, its forecasts for Canada, the eurozone, the U.K. and Japan are roughly the same.

S&P did raise some of growth forecasts for emerging markets. It now sees China’s growth as meaningfully higher as extreme tariff fears ease. S&P lifted forecasts by 80 bps to 4.3% for 2025 and 100 bps to 4.0% for 2025. It raised Brazil’s growth by 40 bps to 2.2% for this year. It also increased its forecasts for India and Mexico, and lowered South Africa’s.