The risk of the global economy slipping into recession this year has risen sharply, according to 50 leading economists.
A recent Reuters survey found that most economic analysts believe the tariffs imposed by US President Donald Trump have undermined global business confidence and destabilised investment environments, sharply increasing the likelihood of a downturn.
Only three months ago, the majority of these economists were forecasting steady and robust global growth.
However, Trump's bid to "reshape" global trade—particularly through tariffs on all imports—has dealt a heavy blow to financial markets, erasing trillions of dollars in equity value and shaking investor faith in the US dollar and American assets.
Of the more than 300 economists surveyed, none viewed the tariff policy positively.
A resounding 92% asserted it had negatively impacted business sentiment, while a mere 8%, mainly from India and other emerging economies, remained neutral.
When asked about the probability of a global recession this year, 101 of 167 analysts described the risk as "high" or "very high", while 66 considered it "low", with only four regarding it as "very low".
The outlook for 2025 has also dimmed. Global economic growth projections have been downgraded from 3% to 2.7%, with the International Monetary Fund (IMF) offering a marginally higher forecast of 2.8%.
Out of 48 economies surveyed, growth forecasts for 28 have been cut.
Notably, China and Russia are expected to perform relatively better, with anticipated growth rates of 4.5% and 1.7% respectively.
Conversely, Mexico and Canada are projected to see significant declines, with growth rates falling to 0.2% and 1.2%—the steepest drops observed in recent months.
The prospects for 2026 are equally unpromising.
Economists suggest that the downturn triggered by Trump's tariff policies will not be easily reversed.
Of the 167 economists surveyed, 60% believe the global economy faces a high or very high risk of recession this year.
Timothy Graf, chief macro strategist for Europe, the Middle East, and Africa at State Street, said, "It is extremely difficult to be optimistic about growth in the current environment. Even if all tariffs were removed today, the significant damage to credibility in US bilateral and multilateral trade and defence agreements would leave lasting scars."
Central banks around the world had aggressively raised interest rates to combat the worst inflationary surge in decades.
Yet analysts now warn that renewed tariff pressures could stoke fresh inflation, undermining these efforts.
Graf further remarked, "Excluding your biggest trading partner creates enormous volatility in prices, with negative consequences for real incomes and aggregate demand."
He cautioned that the previously remote threat of stagflation—where low growth, high inflation, and rising unemployment occur simultaneously—is now a tangible risk.
A stagflationary scenario is marked by economic contraction, rising prices, and shrinking employment opportunities.
Reuters survey also revealed that 19 out of 29 major central banks are expected to miss their inflation targets this year, though this figure may fall to 15 next year.
Experts warn that the ripple effects of Trump's trade policies have created lasting uncertainty not only within the United States but across the global economic system.
In the coming years, this turbulence is likely to exert sustained pressure on world markets.
The critical question now is how global leaders will rise to the challenge of forging a stable and credible trade policy for the future.
