Will the global economy stall?

The timing could hardly have been less propitious. Just as the world economy was showing signs of stabilising, the odds of a policy-induced global recession have risen significantly.

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The latest update to the Brookings-FT Tiger Index reveals a mixed picture, with the financial index declining and private-sector confidence crumbling even as macroeconomic data (which the official indicators) suggest a more benign scenario.

Obviously, the biggest factor is US President Donald Trump’s tariff policy, which has disrupted world trade and fuelled turmoil in financial markets, undermining growth prospects and dulling or postponing part of the year. The US economy performed well in the first quarter of 2025: output and employment grew robustly through March, and inflation fell gradually. But the all-important announcement of “reciprocal” tariffs, coupled with practically all US trading partners.