The global economy has demonstrated resilience in the face of increased tariffs, according to a report released on March 15, 2024, by the UN Department of Economic and Social Affairs. The report highlighted that despite the tariff shock, economic activity remained robust, bolstered by advanced shipments, inventory buildup, and strong consumer spending. Continued monetary easing and stable labour markets played a crucial role in supporting this resilience.
The report indicates that while macroeconomic policies are expected to cushion the impact of tariffs, growth in trade and overall activity is likely to slow in the near future. Specifically, the economic growth in the United States is projected to decelerate to 1.9 percent in 2025, down from 2.8 percent in 2024. Growth is anticipated to rise slightly to 2.0 percent in 2026 and 2.2 percent in 2027, aided by expansionary fiscal and monetary policies.
Inflation in the United States is expected to remain above the 2 percent target in 2026, though it should gradually decrease as the effects of tariffs diminish and housing costs stabilize. Economic growth in China is projected to reach 4.6 percent in 2026 and 4.5 percent in 2027, a decline from an estimated 4.9 percent in 2025. The report notes that a temporary easing of trade tensions with the United States, including targeted tariff reductions and a one-year trade truce, has contributed to stabilizing confidence in China’s economy.
Regional Outlooks Show Varied Growth Prospects
In the European Union, growth is forecasted at 1.3 percent in 2026 and 1.6 percent in 2027, compared to 1.5 percent in 2025. This growth is largely attributed to resilient consumer spending, although the report warns that higher US tariffs and ongoing geopolitical uncertainty may negatively impact exports from the region.
The report also highlights trends in South Asia, where economic growth is expected to moderate to 5.6 percent in 2026, down from 5.9 percent in 2025. Growth is projected to return to 5.9 percent in 2027. In India, the economy is estimated to grow by 7.4 percent for 2025, with forecasts of 6.6 percent for 2026 and 6.7 percent for 2027. This growth is supported by strong public investment and resilient consumption, which are expected to largely offset the adverse effects of increased US tariffs.
The report underscores that while the global economy has shown resilience, the anticipated slowdown in growth rates across major economies presents challenges that policymakers will need to navigate in the coming years.
