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2mo ago

S&P Cuts Global Growth Forecasts as US Tariff Policy Reshapes Economic Outlook

India's GDP projections for FY26 and FY27 have been lowered, with global and regional economies facing significant slowdowns due to trade policy uncertainty.

S&P warns of 2025 slowdown, inflation jump as US tariffs ripple through global economy
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S&P Global Ranking, India, Growth Projection

Overview

  • S&P Global Ratings reduced India's FY26 GDP growth forecast to 6.3% and FY27 to 6.5%, citing the impact of US tariff measures and policy uncertainty.
  • Global growth projections for 2025 and 2026 were downgraded by 0.3 percentage points, driven by the ripple effects of heightened US import tariffs and retaliatory actions.
  • The US economy is expected to see a 0.6 percentage point decline in growth over 2025–26, while China's growth is projected to drop by 0.7 percentage points during the same period.
  • Emerging Asia-Pacific economies, including Malaysia, Vietnam, and Thailand, are forecast to experience GDP growth declines of up to 1 percentage point annually.
  • Despite increased downside risks, S&P maintains that a US recession is not anticipated but warns of ongoing volatility and long-term global economic uncertainty.