U.S. policy unpredictability, led by tariffs, continues to cloud the global macro picture, according to a report that S&P Global Ratings 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," said S&P Global Ratings global chief economist Paul Gruenwald.

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, we now see slightly higher growth in the U.S. this year (at 1.7%) as tariff-related impacts look lower than previously. Elsewhere, our forecasts for Canada, the eurozone, the U.K. and Japan are roughly the same.

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