Oxford Economics - World GDP: Forecast Revisions

We've cut our world GDP growth forecasts over the past few months for 2025 and 2026 due to the substantial, albeit scaled back, US tariff hikes. We now expect the global economy to grow by 2.4% in 2025 and 2026. Every economy is a loser from the US's dramatic policy shift. But the US slowdown will be especially acute, and those economies with strong US trade links and facing high tariffs will also perform worse than average.

Our baseline forecasts are conditional on US tariffs on the rest of the world being maintained at 10%, with three exceptions. We assume the average effective tariffs on Canada and Mexico will be a little bit higher at 13% and 15%, respectively, but are expected to fall below 2% when a new USMCA trade deal is negotiated next year. We believe China's tariff will remain at 30%. Still, the path is highly uncertain and there are upside and downside risks.

We now expect the US economy will grow by just 1.5% this year and 1.9% in 2026. In addition to the real income squeeze from tariffs, consumer spending and investment will be dented by the asset price sell-off and continued heightened policy uncertainty. Activity could also be hit in the short term by supply chain disruption associated with the sudden and unexpectedly broad and sharp rise in tariffs.

While the US is set to face a combination of supply and demand shocks, the rest of the world will be hit by a more conventional external demand shock. Those economies with strong trade links with the US and facing particularly sharp tariff hikes will be hit especially hard. The key exception is China, as we expect policymakers there will be more proactive in delivering stimulus measures to counter the hit to growth from higher tariffs.

A broader contraction in global trade beyond that caused by weaker US imports is inevitable as the tariff impacts ripple through global supply chains. This will be exacerbated by households and businesses limiting spending in response to heightened uncertainty and the plunge in global asset prices, meaning that even economies that are relatively economically isolated from the US will face an economic slowdown.

Global Valve & Actuator Market Outlook

The Global Valve and Actuator Market Outlook 2024 is the eighth annual market report prepared by Oxford Economics, one of the world’s foremost independent global economic forecasting firms. The report is commissioned by the British Valve and Actuator Association.

Each October, the report is published with updated and revised data sets. BVAA members can use the online Power BI data tool, a business analytics platform developed by Microsoft. It permits easy visualisation of the data, as well as the export of data and charts to other applications.

If you are a BVAA member, you can access the 2024 report and Power BI data tool, via the Member Area of our website here: https://www.bvaa.org.uk/login-here.asp

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