1、A member of MUFG,a global financial groupJune 12,2025(Original Japanese version released May 30,2025)Global Economic OutlookQ2 2025Global summary2The global economy is navigating a complex landscape of volatile trade policies and geopolitical uncertainty,yet underlyingmacroeconomic fundamentals rema

2、in relatively firm in many regions.While we fully expect global growth to moderate in2025-26,led by weakness from the US,our central scenario assumes that a sharp global slowdown will be avoided.Central bank easing,lower energy prices and(in some cases)bolstered fiscal support are all set to underpi

3、n overall activity.Although uncertainty around trade policy is set to remain elevated,we also believe that there is scope for further de-escalation ontariffs,which may help lift sentiment.In the US,inflation is likely to rise in the near term and policy uncertainty is set to remain elevated,weighing

4、 on consumption andinvestment.We expect US GDP growth will slow from 2.8%in 2024 to 1.5%this year.Against that backdrop supply-sideprice pressures but weaker demand the Fed is likely to proceed cautiously,with gradual rate cuts to come once unemploymentstarts to increase more clearly.There was relat

5、ively buoyant growth in both the euro area and the UK at the start of the year.This surge is related to distortionsfrom the front-loading of imports by US firms ahead of tariff hikes,and there will be payback in future data and hence a risk ofquarterly contractions later in the year.However,underlyi

6、ng domestic demand appears to be in reasonable shape and there isfurther support to come from German-led fiscal easing.In terms of annual average rates,we see broadly steady Europeangrowth across our projection horizon.In Japan,there was a small Q1 GDP contraction with consumption flat amid persiste