Economic consequences of tariffs are becoming evident

August 2025 / September 2025

Each month Oxford Economics’ team of 300 economists and analysts updates our baseline forecast for 200+ countries using our innovative Global Economic Model. Fully linking individual country models through global assumptions about trade volume and prices, competitiveness, capital flows, interest and exchange rates, and commodity prices, our model provides a rigorous and consistent structure for forecasting and understanding the impact of economic shocks. Below is just the top-level summary of our analysis of the latest economic developments.

• We now expect world GDP to expand by 2.6% this year and 2.4% in 2026.
• We’ve raised our forecast for this year by 0.1ppt because activity has been boosted by firms trying to frontload orders ahead of tariff deadlines. 
• But we expect quarterly GDP growth rates will slow in H2 2025 and have lowered our GDP growth forecast for next year by 0.1ppt.

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