Five optimistic scenarios for the global economy

Happy Sunday. Thank you very much for your answers to the last newsletter going to the viral in Canada. I went to the online discussion on Ben Mulroney’s Radio Show (The link here).

Now this week. Tariffs, uncertainty and slow down The US economy is a leading analyst to reduce the 2026th annual growth forecasts of 2025 and 2026 to the global economy. This is hard surprising. Most of the Donald Trump did not expect to return to the White House to make this disorder.

Given the Gulhin, I went to look for optimism pockets. Thus, the five scenarios that can express global economic forecasts in the near future.

Scenario 1: Trump watches tariff plans

The last strangeness in the S & P 500 was not enough to protect the US president from the agenda growing tariff. However, as the leadership in Biden, the stock exchange and approval ratings do not always move together. The latter tends to follow the consumer confidence (especially for the Republicans) as the expectations of inflation recently increased.

The impact of import duties may result in households, confidence and confirmation. The Americans are still limited to the aftercoming pain from the pandemic pandemic pandemic pandemic. This can increase pressures to reduce the white house or items. The 2026 cart will appear quickly.

Most analysts think that. But Trump has a knack to facilitate the tariffs and time. Even a smaller boot, including a more structured approach to a carvier, a more structured approach or April 2 “reciprocal tariffs – will improve its predictions of its tariff agenda.

Scenario 2: European growth surprises

Most forecasts are waiting for Germany’s appetite for higher investment costs and higher defense costs in Europe – to increase the growth of the euro area. But there are three more potential accommodations to review.

First, a number of positive developments are united in the EU. Higher government expenditures, rising domestic stock markets and the “flag rally” effect will increase consumer and business confidence in terms of Trump tariff and NATO threats. It can then create a higher economic impact than expected.

For example, there is enough room for less careful consumers, which are still higher than 3 percent of the pandemic with the ratios of household deposits. Companies can push more investment decisions on line for higher capital assessments and capital flow. Policy reform may be more in front.

Second, how the continent interprets the needs of the security costs. Goldman Sachs estimates that Europe’s materiel can demand 160 billion euros (0.8% of GDP), which meets the annual investment in new supply. How the effective, pace and nature depends on how the expenses of the near-term growth depend on the room again. (For example, the Protection R & D expenses can have a positive effect in other areas.)

However, the European Economist in the capital’s economy, Andrew Kenningham, a European economist, is more suspicious. “Azerbaijan is likely to increase the increase in the cost of several countries, it is likely to be a lot of protection, not current expenses, and some equipment will be used and some will be imported,” he said.

Third, the ceasefire in Ukraine can reduce gas prices, increasing risk growth in markets and increased confidence to increase the country’s GDP by 0.5 percent.

Scenario 3: Chinese global growth slow

In the same way, what happened in China – the world’s largest exporter and manufacturer – will also increase global forecasts. How?

The first can increase the confidence of the private sector and increase the experience and investment activity above expectations. China’s artificial intelligence company DeepSeek is all positive to reset the ties with Chinese business titanes after shock progress in the model development of the model development of DeepSEEK. Global investors are also encouraged; Flows have increased to the capital exposed in China.

Second, the AI ​​can increase China’s growth. Deepseek’s cheaper price, a large source of opening, a large language model removed optimism that technology can be taken faster. Will invest higher in data centers. Productivity gain can also be faster. Recently, the enterprises that make the auto industry telecommunications, said they plan to use Deepseek’s technology.

Third, Beijing’s economic support may surprise. At the National People’s Congress of this month, the government is committed to a financial deficit of 4% of GDP – a financial deficit in three decades. Although the analysts brought more evidence to support households, the need for a communist party has become more vocal.

“The main difference in this year’s policy messaging compared to previous years, Beijing said that China’s strategy in politics and Chinese research.” This remains open to provide additional economic support. “

It will depend on the US tariffs for both European and Chinese exporters, as well as the American importers that American importers can go. For some sectors, it can be more difficult than expected, especially in the conditions of economic uncertainty of the United States.

Scenario 4: US growth surprises

Although Trump has followed tariffs, other internal economic developments can make their effects.

First, tax reduction and regulation is still in the back pocket of the White House. Extension of Trump’s tax discounts and provisions at workstations (most ends in late 2025), will support the consumer and investment in the margin. Tax Fund Approximate This long-term economic output will increase by 1.1 percent.

The corporation tax will be set up on this. Concerns about higher debt – can eat any upside down and give higher results. (Increasing the disbelieving TCJA $ 4.6TN increased $ 4.6. Another boost, red ribbon, especially to severe planning requirements, will come out of efforts to cut red ribbons.

Second, the faster the AI ​​admission is in the world. Matthew Martin, a Oxford economy, offers a combination of lower interest rates and a combination of tax reliefs next year. Although AI was used in American institutions, spread and spreading is a linear process. New applications of the possible improvements and technology can accelerate the impact of productivity.

Scenario 5: low interest rates

Finally, the Central Bank’s policy rates can increase consumption and operating activities, faster than the consensus.

Inflation in developed economies is currently operated by internal factors – especially inflation equipped with salary growth. However, the indicators of the labor market clogging facilitates the ratios of employees and vacancy. This may fall faster than expected salary price pressure, which allows central bankers to make additional cuts.

Imports increases inflation expectations (as a result of tariff wars) and increase concerns that high degrees can remain. China can be a blessing factor here. In BCA research, Sima mobilized in the last trade war, Beijing exporters for cushion. This can replace the inflation effect of revenge tariffs together with the possible provocation of the US order.

These scenarios are very hopeless? Perhaps. Each is supported by the assumptions from blind spots around the policy developments of the house, work and investor whose mood sweeps.

Considering that economic trajectories can still change, in recent months, the change of several common marketplets is operating, the change in economic trajectories is a valuable exercise (see 🙂 Exceptional problem in the United States, China’s “Investment” and Unlimited European capital).

However, the transparent scale and influence of the US economy and its capital markets should be changed to be a surprise of global growth, especially in the subside (currently less than predicted), the economic agenda of the White House. This is not possible. But I will leave the exact bets for rough and maga-ods.

Send me your scenarios and thoughts above freelunch@ft.com or x @ TeamPperikh90.

Food for thinking

After a recent number of progress in submachine guns developed by the EU, the University of Edinburgh presented the world’s first EU robot Barista. This Related research paper Smarter robot technology emphasizes economic opportunities that may come with smarter robot technology outside of trophies.