US policy uncertainty weakens growth estimates: S&P

ISTANBUL

International credit rating agency Standard & Poor's has revised its growth expectations downwards, pointing to uncertainties in US policies.

"Heightened U.S. policy uncertainty, mainly related to tariffs, is dominating the global macro narrative," it said in a report released Thursday.

The agency's gross domestic product (GDP) growth forecasts were lowered due to US tariff effects and spillovers from a steeper decline in US sequential growth.

While the global economic growth forecast was maintained at 3% for this year, it was reduced from 3.1% to 3% for 2026.

The statement also noted that Europe's growth will be lower this year but pointed out that this will improve from 2026 with higher defense and infrastructure spending.

Meanwhile, the economic outlook for the Chinese economy remained stable.

"We are watching the effects on demand from protracted U.S. policy uncertainty. Should these materialize, the result would be a material slowdown in growth," it said.

The agency noted that there was a significant change in the growth forecast this quarter due to the uncertainty in US policies.

The growth forecast for the US economy remained at 1.9% for 2025 and was revised from 2% to 1.9% for next year.

The growth forecast for the Eurozone was reduced by 0.3 percentage points to 0.9% for this year and increased by 0.1 percentage points to 1.4% for 2026.

Growth forecasts for this year were also revised downwards for Germany, France, Italy, the UK, Japan, India, Mexico and South Africa.