RESEARCH — Nov. 19, 2025
Global Economic Outlook: November 2025
By Ken Wattret
Shutdown ends—uncertainty does not
The longest US government shutdown is over, but the uncertainty clouding the economic outlook is not.
With a data drought leaving financial markets in the dark over the state of the economy, the potential for volatility surrounding upcoming data releases is high. They could also move the needle (again) on expectations for US Federal Reserve easing, with futures markets having come around to our view that an excessively rapid pace of easing was being priced over the next year or so.
At the time of writing, a roughly 50% chance of a 25-basis-point cut was discounted for mid-December’s meeting, down from a near-100% probability prior to late October’s rate cut.
A return to the estimated neutral range for the Fed funds rate of 3.00%-3.25% is now priced in only in late 2026, aligning with our forecast.
What does our Purchasing Managers Index data tell us?
US data limitations complicate an assessment of recent economic developments, but S&P Global’s Purchasing Managers’ Indexes™ (PMIs®) suggest that US economic conditions have remained solid. Amid the official data drought in the US, some alternative indicators have suggested that labor market conditions have continued to soften.
Still, based on October’s PMIs, the US continued to lead the major developed economies in terms of output growth, with improvements evident in the manufacturing and services indexes.
October’s PMI data also offered some cautiously positive signals for some of the major economies that have been struggling recently, including Canada, the eurozone and Japan. That said, trade worries and geopolitical uncertainties continued to dampen businesses’ expectations for the year ahead.
How much will GDP grow in 2025 and beyond?
Our global real GDP growth forecasts for 2025 and 2026 have been lifted, although only slightly.
The major change in our November forecast update is a more positive assessment of growth prospects in mainland China. Annual real GDP growth forecasts for 2025–27 have been raised to 5.0%, 4.6% and 4.5%, respectively, about one-quarter of a percentage point higher in each year than our October projections.
The upward adjustments primarily reflect a more positive assessment of export prospects and a more pro-growth policy environment outlined in the 15th five-year plan. Although unfavorable base effects and potential trade barriers from non-US markets still favor a moderation in export growth momentum from the final quarter of this year, domestic demand is expected to benefit from more expansionary monetary and fiscal policies.
Partly offsetting the boost from the higher forecasts for mainland China are downward revisions to 2026 annual real GDP growth projections for a few other major economies.
One is Brazil, with the central bank’s recent tough talk on inflation pointing to a later start to rate cuts in 2026 than we had previously been forecasting. Recent activity data in Brazil also point to a difficult second half of 2025 growth-wise.
The forecast for Russian growth in 2026 has also been cut substantially due to various headwinds, including the negative effects of additional sanctions and a planned value-added tax increase. We also trimmed our UK forecast for 2026, which is now sub-1% and a little below market consensus.
How could policy uncertainty impact the economy?
Policy uncertainties are not confined to monetary matters. The legal status of the US tariffs implemented under the International Emergency Economic Powers Act remains uncertain. Should the Supreme Court rule against those tariffs, the US administration would pursue alternative routes to the same objective.
Still, in the interim, uncertainty would rise, including over the potential impact on the US public finances and Treasury yields. The latter rebounded as rate cut expectations were pared back, although the wobble in tech stocks suggests limited near-term upside absent some very strong US data.
While sovereign yield spreads in Europe have been on a tightening track, the outperformance of gilts has gone into reverse amid renewed concern that the upcoming budget on Nov. 26 will not deliver credible tightening measures. The incessant uncertainty over fiscal developments is one of various factors taking a major toll on the UK’s economic performance.
This article was published by S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global.