economic forecasts

The Bank of England is anticipated to cut interest rates, likely by a quarter-point to 4.25%, despite near-term inflation concerns. This decision is largely influenced by potential economic shocks from US tariffs. Economists will closely examine the bank's updated economic forecasts for indications of a more proactive policy approach, especially concerning growth and inflation.

Moody's Ratings has revised India's GDP growth forecast for 2025 to 6.3% due to global policy uncertainty and trade limitations. Geopolitical friction with Pakistan and terror attacks present additional risks. While maintaining a 6.5% growth prediction for 2026, Moody's anticipates the RBI will implement rate cuts to bolster domestic economic growth.

Stocks climbed on Wednesday, buoyed by China's economic support measures and anticipation for US-China trade talks. The S&P 500 and Dow saw gains, though tech stocks lagged. Disney's strong earnings boosted the market, while trade concerns and tariff impacts continue to weigh on investor sentiment and company forecasts, creating uncertainty despite solid employment figures.

Deloitte projects India's economy to grow at 6.6% in FY26, balancing domestic stimulus with global trade challenges. Tax cuts are expected to boost consumer spending, while trade uncertainties, particularly tariffs with the US, pose a risk. The nation's economic outlook depends on navigating trade relations and stimulating consumer demand.

S&P Global Ratings has lowered India's GDP growth forecasts for 2025-26 and 2026-27, citing trade-related uncertainties stemming from potential US tariff policies. This revision aligns with similar downward adjustments by the Reserve Bank of India.

The uncertainty created by Trump is guaranteed to slow world growth. India cannot escape the consequences even though it will be less hard hit than others.

Amidst earnings uncertainty, companies grapple with a volatile trade environment. General Motors trimmed its profit outlook due to auto tariffs, while Harley-Davidson withdrew its forecast entirely. Hershey is maintaining its forecast despite tariff expenses and rising cocoa prices. Church & Dwight downgraded expectations, citing tariffs and weakening consumer demand, planning strategic adjustments to mitigate the impact.

S&P Global Ratings has revised down the US GDP growth forecast for 2025 to 1.5% and 2026 to 1.7%, citing uncertainties from reciprocal tariffs announced by the US. While anticipating a slowdown, S&P doesn't foresee a US recession, but acknowledges downside risks due to potential tariff impacts on the real economy and global trade.

Moody's Ratings projects a significant slowdown in China's economic growth, forecasting GDP to dip below 4% in the next two years. Intensifying trade tensions and weakening global conditions are expected to dampen investment and consumer confidence.

According to the IMF's World Economic Outlook April 2025, India is projected to become the fourth largest economy globally in 2025, surpassing Japan with a nominal GDP of $4,187.017 billion. The report indicates continued growth, forecasting India to overtake Germany by 2028 and achieve a $5 trillion economy by 2027.

The Bank of England is widely anticipated to cut its key interest rate to 4.25% amidst concerns over potential economic fallout from US tariffs. This decision, expected today, follows similar moves by the European Central Bank. Markets are keenly observing the central bank's communication for hints of further rate reductions.

US markets opened positively, fueled by strong quarterly results from tech giants like Microsoft and Meta, alongside solid earnings from CVS Health. Meta's shares surged due to robust advertising sales driven by AI. However, McDonald's reported a decline in US same-store sales, citing economic uncertainty, while General Motors lowered its profit forecast due to tariff impacts, creating market unease.

Wall Street experienced a downturn, led by technology stocks, as the S&P 500 ended its nine-day rally. The Dow and Nasdaq also declined ahead of the Federal Reserve's meeting, where interest rates are expected to remain unchanged. Concerns about potential inflation, driven by tariff uncertainties, and the recent economic contraction are weighing on the market, prompting companies to adjust forecasts.

The US economy unexpectedly shrank in the first quarter of 2025, contracting at an annual rate of 0.3%. This downturn, driven by increased imports, slower consumer spending, and reduced government expenditure, has fueled speculation about potential Federal Reserve rate cuts.

Global share markets displayed mixed performance amid light trading as oil prices declined following OPEC+'s decision to increase production. US futures experienced a dip, while European markets showed varied results. The OPEC+ decision is speculated to be influenced by US pressure, impacting oil prices and raising concerns about the global economic effects of trade policies.

Gold prices surged on Tuesday due to increased safe-haven demand following President Trump's tariff announcements. Investors are also awaiting insights from the Federal Reserve's policy meeting, with expectations of maintained interest rates.

India's Goods and Services Tax (GST) revenue soared to a record Rs 2.37 lakh crore in April, marking a 12.6% year-on-year increase. This figure surpasses the previous high of Rs 2.10 lakh crore from April 2024.

Microsoft reported strong Q1 earnings, exceeding expectations with $70.1 billion in revenue and a 18% profit surge. Cloud and AI divisions drove growth, with a 21% increase in cloud revenue. Despite economic volatility, Microsoft's performance boosted investor confidence, with shares rebounding after the earnings release, signaling optimism in the tech sector.