Advanced economies are forecast to expand by 1.6% in 2025, while emerging markets and developing economies (EMDEs) are projected to grow by 4.2%, driven by strong performances in China and India (see Table 1 for projected growth forecasts). In the United States, economic momentum continued into Q3 2025 despite a government shutdown that delayed official GDP data releases. Growth in Q2 was revised upward to 3.8% (seasonally adjusted annualized), supported by robust consumer spending and reduced imports. Signs of cooling appeared late in Q3 as inflation edged up to 3.0% year-on-year (YoY) in September, prompting the Federal Reserve to cut interest rates in October. Overall, U.S. GDP is forecast to grow 2.0% in 2025 and 2.1% in 2026, supported by resilient consumption and easing monetary conditions.

In the Eurozone, GDP increased 0.2% quarter-on-quarter (QoQ) in Q3 2025, up from 0.1% in Q2 and slightly above expectations. France and Spain led growth with increases of 0.5% and 0.6%, respectively, supported by exports, household spending, and investment. However, Germany experienced stagnation due to weaker export activity, and Italy’s output remained flat amid industrial contraction. Year-on-year growth reached 1.3%, marginally exceeding forecasts and highlighting resilience despite geopolitical and trade headwinds. For 2025, Eurozone growth is projected at 1.2%, easing slightly to 1.1% in 2026, supported by fiscal expansion in Germany and steady consumer demand.

Among emerging markets, China’s economy expanded 1.1% QoQ (4.8% YoY) in Q3 2025, outperforming expectations due to liquidity support and credit easing measures. The central bank signaled further rate cuts to encourage lending and investment, although renewed U.S.–China tensions—driven by proposed tariffs of up to 100%—pose new risks. China’s GDP growth is forecast at 4.8% in 2025 and 4.2% in 2026. Growth projections for India and Brazil have been revised upward to 6.6% and 2.4%, respectively, while Russia’s outlook has been downgraded to 0.6%.

Global trade tensions eased following a one-year U.S.–China truce in October 2025, offering short-term relief through suspended export controls and reduced surcharges. However, the outlook remains fragile amid ongoing policy uncertainty, fiscal and financial risks, rising protectionism, and China’s weak property sector, though improved cooperation and AI-driven productivity present potential upside.