The global picture masks notable regional variation. While some economies are performing steadily, others face mounting pressure from trade tensions, policy uncertainty and international conflict. Inflation dynamics are diverging, with a particularly stark contrast between the inflationary pressures facing the US and the deflationary challenges confronting China. Fiscal and monetary paths are also fragmented, reflecting different priorities and levels of resilience. The sections that follow highlight major developments across key regions, focusing on growth prospects, policy direction and vulnerabilities. United States The outlook for the US remains subdued, despite signs of stabilization. In April, just 22% of chief economists expected moderate growth in 2025; by August, that share had increased to 49%. However, a narrow majority (52%) still anticipate weak or very weak growth, positioning the US behind other geographies. Trade policy shifts are a key driver of this fragility. Growth data have been volatile, with annualized real GDP growth swinging from a 0.5% contraction in the first quarter to 3.3% growth in the second.19 Data for the second half of the year is likely to be shaped by the initial impact of new tariffs, which now cover a large number of trading partners.20 Other recent indicators paint a mixed picture. Consumer sentiment dipped by less than 3% in early September but remains higher than in April when uncertainty was at its highest.21 Domestic consumption increased in the second quarter, but investment weakened.22 Purchasing Managers’ Index (PMI) data in August showed business activity rising at its fastest pace this year and job creation nearing a three-year high, while US labour market data from early September reflected job losses in July and slow jobs growth in August.23 Inflation risks remain elevated. Fifty-nine percent of chief economists surveyed expect high inflation in the year ahead, a higher proportion than for any other region. Consumer prices increased by 2.9% in August,24 while producer prices rose by 2.6%, cooling from a sharp increase of 3.3% in July and suggesting that tariff-driven cost pressures are working their way through supply chains.25 Long-run inflation expectations, which eased earlier in the year, climbed from 3.4% in July to 3.9% in September.26 Policy directions are evolving. Monetary policy was expected to loosen by the respondents, with 85% anticipating rate cuts. The quarter-point reduction that markets broadly expected took place in September, following a string of underwhelming jobs reports.27 Fiscal policy is also expected to become more expansionary: 57% of respondents foresee further loosening, driven by a new fiscal package projected to add more than $3 trillion to the US deficit over the next decade.28 Europe The European outlook is improving but remains fragile. GDP growth slowed in the second quarter of 2025, rising by just 0.2% in the EU and 0.1% in the euro area, compared to 0.5% and 0.6%, respectively, in the first quarter.29 By contrast, the US grew by 0.7% in the second quarter (3.3% annualized).30 Employment levels edged up by 0.1% in both the EU and the euro area.31 Survey sentiment has strengthened: 60% of chief economists expect moderate or strong growth in Europe over the coming year, up from 47% in April. Inflationary pressures are subdued; 44% of chief economists expect moderate inflation, and another 44% expect low inflation for the year ahead. Euro area inflation stood at 2.1% in August,32 prompting the European Central Bank (ECB) to keep rates unchanged.33 Although food price and services inflation declined by 0.1%, respectively, a slowing decline in energy prices slightly increased overall inflation in the Euro area (up by 0.1% from 2% in June and July).34 Fifty-six percent of respondents expect monetary policy to remain steady, while 44% see the scope for rate cuts in the near term. Fiscal policy, by contrast, is firmly expected to loosen: 74% of chief economists anticipate expansionary budgets, reflecting diverging fiscal approaches. Germany has embarked on a historic spending programme35 while France is struggling to rein in its deficit.36 Together, these and similar choices are shaping a more accommodative fiscal stance across the region.Regional divergence 7 Chief Economists’ Outlook September

Chief Economists Outlook September 2025