Global economic outlook: March 2025

The spread of tariff actions and their associated uncertainties are heightening the risk of a global economic downturn. Recent data indicates that trade policy-related uncertainty has reached unprecedented levels, contributing to a decline in global growth momentum, as reflected in S&P Global’s Purchasing Managers’ Index. Consequently, the global real GDP growth projection for 2025 was revised down to 2.5%, marking the weakest performance since 2009, excluding the impact of the COVID-19 pandemic. A slight recovery is anticipated in 2026, with growth expected to reach 2.7%, driven by increased fiscal stimulus in Europe. However, the outlook for both years remains precarious, particularly if there is no significant change in Trump administration policies.

North America had the most notable downward revisions to growth forecasts for 2025 and 2026. Recent indicators from the US suggest a weaker growth trajectory for the first quarter of 2025 than previously estimated, compounded by additional federal layoffs and higher import tariffs. This has led to an upward adjustment in the US consumer price inflation forecast for 2025, prompting expectations that the Federal Reserve will maintain policy rates throughout most of the year. While futures markets anticipate earlier easing from the Fed, this scenario is contingent on more severe economic weaknesses than currently expected.

Monitor the health of global economies and anticipate changing market trends with the Purchasing Managers’ Index.

Potential US tariffs on Thai rice imports may open doors to other Asian destinations

The US’ potential tariffs on Thai rice imports could lead buyers to consider more affordable fragrant rice alternatives from Vietnam or Cambodia. Although President Donald Trump has not confirmed any plans to impose tariffs, the possibility remains a concern for importers. Thailand is the largest rice supplier to the US, exporting 786,582 metric tons of milled rice in 2024, an increase from 729,982 metric tons in 2023. Presently, there is a 1.4 cent/kg tariff on all imported jasmine and long-grain rice, but any increase in tariffs could significantly alter purchasing behaviors.

Wanniwat Kitireanglarp, deputy secretary general of the Thai Rice Exporters Association, outlined a two-phase response from importers. Wanniwat said importers may increase orders to stockpile Thai rice in anticipation of higher prices, leading to stable or even increased export figures for the first half. However, once tariffs are enacted, Thai rice may be less competitive compared with cheaper options from Vietnam or Cambodia, potentially limiting growth opportunities in the US market. Despite these concerns, US sources remain doubtful that tariffs will alter purchasing behaviors for rice imports.