US and Chinese strength won’t boost all other economies

Each month Oxford Economics’ team of 450 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.

• Upward revisions to US and Chinese GDP growth in Q4 meant that the previously anticipated soft end to 2025 failed to materialise.
• While we now project activity will rebound by less than we previously expected in early 2026, world GDP growth this year has been mechanically nudged up by 0.1ppt to 3%, in line with last year’s gain.
• The US government shutdown dragged on growth late last year. Still, we estimate the economy recorded a healthy 2.8% q/q annualised gain in Q4 after Q3’s impressive 4.4% rise.

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