Global & U.S. Economic Update - June 5, 2025

🌍 Global Economic Outlook

📉 Growth Projections

United Nations: Revised global growth forecast down to 2.4% for 2025, citing escalating U.S. tariffs and global trade tensions.
World Bank: Maintains a 2.7% global growth outlook for 2025–2026, reflecting a plateau at low growth levels.

💱 Trade & Inflation

Tariffs: Recent U.S. tariff hikes have disrupted supply chains, driving up production costs and global inflation.
Dollar Shift: Citigroup CEO Jane Fraser highlights a transition from cooperative globalization to a multipolar trade environment, with growing skepticism over U.S. dollar reliability.

🌐 Regional Highlights

China: GDP growth expected to slow to 4.6% in 2025 due to weak consumer demand and trade pressures.
India: Positioned as a global growth engine with inflation aligning to central targets, raising hopes for monetary easing.
European Union: GDP growth forecast at 1.1%, inflation declining to 2.1%.

🇺🇸 U.S. Economic Outlook

📉 GDP & Growth

Q1 2025 Real GDP: Contracted −0.3%, due to rising imports and reduced government spending.
IMF Outlook: U.S. GDP forecast cut to 1.8% for 2025, down from ~3% in recent years.

📈 Inflation & Monetary Policy

PCE Inflation: Rose 3.6% in Q1, signaling persistent inflationary pressure.
Federal Reserve: Maintaining a cautious stance, considering rate cuts if inflation remains elevated.

💰 Fiscal Policy & National Debt

Trump Administration: New tax/spending bill to add $3.8 trillion to national debt.
Debt-to-GDP: Reached 98% in FY2024; IMF urges deficit reduction to avoid fiscal strain.

🛍️ Consumer Sentiment & Retail Trends

Sentiment: Declined for 5th straight month, nearing historical lows amid inflation anxiety.
Retail Performance: Mixed—TJX sees gains from value-seeking shoppers, while Target reports sales drops on weaker consumer demand.

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