Global Growth Upgraded — But Geopolitical Risks Loom

Global growth projections have seen a rare uplift, with S&P Global Market Intelligence revising 2025–26 GDP forecasts upward for key economies. The unexpected bump comes amid stronger-than-expected early-year activity, driven in part by pre-emptive moves ahead of anticipated U.S. tariff increases. Notably, the UK’s outlook for 2025 has almost doubled, and even China — despite slowing — has received an upgrade. For now, the numbers point to resilience.

Yet behind the optimism lies a geopolitical minefield. Financial markets may be discounting risks from the Israel-Iran conflict, but analysts warn that any sudden escalation — particularly involving a U.S. military decision — could swiftly disrupt the landscape. Former President Trump’s looming stance on Iran could act as a major inflection point for risk sentiment and global investment flows.

Meanwhile, the global economic backdrop continues to shift: IPO markets are at a historic low, alternative retailers like Temu are booming post-Catch closure, and defence tech upstarts like Palmer Luckey’s venture are rewriting the rules of military innovation.

The latest upgrade in growth forecasts offers a temporary boost to global confidence, but investors and policymakers alike would be wise to stay vigilant. With geopolitical uncertainty mounting and structural shifts underway, the second half of 2025 may be shaped more by political chess moves than economic models.