The risk of a global economic recession has surged due to sweeping US tariffs, according to a new Reuters poll of over 300 economists.
A majority now believe the global economy could contract this year, citing weakening business sentiment and financial instability triggered by President Donald Trump’s aggressive trade policies.
Trump’s administration has imposed blanket tariffs of 10% on all US imports and a steep 145% tariff on Chinese goods, sending shockwaves through markets and undermining investor confidence.
Despite a temporary suspension of some tariffs, businesses remain wary of policy unpredictability.
“Planning for even the next quarter is tough under these conditions, let alone forecasting five years ahead,” said James Rossiter, global macro strategy head at TD Securities.
Economists slashed global growth forecasts for 2025 to a median of 2.7%, down from 3.0% in January.
The IMF offered a slightly more optimistic 2.8%. Forecasts for 28 of 48 major economies were cut, with Mexico and Canada seeing the steepest downgrades.
Over 60% of economists rated the risk of a 2025 global recession as “high” or “very high.” Analysts cited inflationary pressures from tariffs, reduced trade, and growing uncertainty as key drivers of the slowdown.
J.P. Morgan raised its global recession odds to 60%, up from 40%. Goldman Sachs, Barclays, and UBS also warned of significant economic risks if tariffs remain.
HSBC noted markets may already be pricing in a 40% recession probability.
While some economists believe the slowdown could prompt central banks to cut rates, others warn that inflation caused by tariffs may complicate monetary policy responses.
The Federal Reserve is expected to make up to three rate cuts this year, depending on evolving economic conditions.
Experts warn that even if tariffs are lifted, the damage to global trade confidence could have lasting effects.
