Ahough there are no clear signs of a slowdown in trade flows now, with uncertainty at peak levels, the global economy is expected to see a slowdown, with more risks to the downside and more questions than answers, according to CaixaBank, formerly called Criteria CaixaCorp.
According to the initial estimates, the US economy shrank by 0.1 per cent quarter-on-quarter (QoQ) in the first quarter this year (the first negative growth since 2022) and the year-on-year (YoY) rate of change moderated by 0.5 pps to 2.0 per cent. However, the impact of Trump’s policies is starting to weigh on the economy.
In the euro area, GDP grew 0.4 per cent QoQ in Q1 2025 (versus 0.2 per cent in the previous quarter), with the YoY growth rate standing at 1.2 per cent. While imports have acted as a headwind in the US, the latest data indicate that exports have served as a tailwind on the other side of the Atlantic, the Spanish multinational financial services company observed.
Given the choreography and magnitude of the tariff hikes imposed by the US administration, they will continue to have economic implications around the world, as well as knock-on effects on financial markets and on agents’ confidence, it said.
Although a material reduction in the flows of goods is likely over the coming months, particularly between the United States and China, the impact so far is still limited, it added.
