"Global growth proved more resilient than expected in the first half of 2025, especially in many emerging markets but also the United States. Industrial production and trade were buoyed by front-loading ahead of higher tariffs. US tariffs on imports from almost all countries have increased since May, reaching an estimated effective rate of 19.5% at the end of August, the highest since the mid-1930s. While the full impact of tariff increases is still unfolding, early signs of effects are visible in consumer behaviour, labour markets and prices. Labour markets are softening, with higher unemployment and fewer job openings in some economies, while disinflation has stalled in many economies as food prices rose and services inflation remained persistent. Looking ahead, downside risks loom large: further tariff hikes, increased concerns about fiscal risks, renewed inflation pressures could weigh on growth. Financial market repricing, including of volatile crypto-assets could pose additional financial stability concerns. On the upside, easing trade restrictions or faster advances in AI could support stronger outcomes."
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