Tariffs and uncertainty are slowing down the world
The first 100 days with President Donald Trump in the White House have been dramatic and the economic situation is unusually uncertain, interesting and exciting.
Nordic Outlook May 2025
What are the findings in the latest issue of Nordic Outlook? Our economists' give you in-depth theme articles and analysis of trends.
The first 100 days with President Donald Trump in the White House have been dramatic. We expected a flying start to his new term of office and an aggressive stance on both foreign and economic policy issues. Growth potential was relatively good at the start of 2025, but White House policies have radically changed growth and market conditions, where the biggest focus of attention is the ongoing tariff and trade war.
Uncertainty is causing businesses, households and financial markets to hesitate, leading to slower growth, volatile markets and a weaker dollar. Global GDP growth will end up below 3 per cent in 2025 and 2026. The US and China will be hardest hit, but growth-related and financial spillover effects will affect the whole world. Due to fiscal stimulus, Europe will do better. Central banks will continue to cut key interest rates.
Summary of Nordic Outlook May 2025
Investment strategist Johan Hagbarth leads a discussion with chief economist Jens Magnusson and head of forecasting Daniel Bergvall about the state of the global economy and the outlook ahead, as summarized in the latest Nordic Outlook.
(In Swedish)
Theme: Global trade
The size of the “reciprocal” tariffs against the rest of the world announced by President Donald Trump has, at least initially, been linked to how large a trade deficit the United States has with each country. This article analyses the nature of global imbalances and discusses the underlying drivers.
Theme: Fragmented energy transition
The sustainable transition faces challenges, and the geopolitical fragmentation means that the transition to clean energy is taking place at different speeds in different regions. However, it does not weaken the case for renewable energy, where short-term sacrifices yield long-term gains.
United States
We believe that higher tariffs and uncertain policies will lead to a clear US economic slowdown during 2025 and downside risks in the long term as well.
Euro area
Gradual recovery is continuing but with great uncertainty. Inflation will continue to decline, and the ECB can thus keep cutting interest rates despite the unpredictable impact of tariffs and fiscal stimulus.
China
Very high US tariffs and greater challenges to rerouting exports threaten China’s growth strategy, but more expansionary fiscal policy and other efforts to bolster domestic demand will soften the deceleration in growth.
Sweden
Uncertainty has increased for both exports and consumption but household incomes will support growth. Due to a stronger krona and depressed international prices, core inflation will fall below target in 2026. The Riksbank cut its policy rate this June.
Makropodd about Nordic Outlook May 2025
In this edition of Makropodd, SEB’s chief economist Jens Magnusson and head of forecasting Daniel Bergvall discuss the bank’s economic report, Nordic Outlook.
(In Swedish)
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Our macroeconomic flagship report Nordic Outlook contains our economists' views on economic developments in the world. You will find key forecasts as well as an analysis of trends and political decisions that affect the world economy.
