Street Calls of the Week
Investing.com -- Business sentiment toward the global economy has partially recovered following a pause in tariff escalations, with recession risks easing but growth expectations still subdued, according to Oxford Economics.
The June Global Risk Survey, conducted between May 28 and June 10 among 106 businesses, found the perceived probability of a global recession this year dropped to under 15%, down from more than 25% in April.
Despite a shift from April’s pessimism, expectations for global growth remain lower than at the start of the year.
Oxford Economics’ Global Business Sentiment Index now indicates growth of 1.5% by late 2025, 0.3 percentage points below the organization’s baseline forecast and up to 1 percentage point below the levels seen in January.
Only 10% of respondents reported a significantly more negative view of global growth prospects in the past month, compared with 51% in April.
While the number of businesses with a more positive outlook has risen, the report notes that substantial improvements remain limited.
Fewer companies now see global economic risks as heavily skewed to the downside. That share fell below 10%, from 36% in April.
The shift coincides with Oxford Economics’ own baseline forecast revision, which lowered expected global growth by 0.2 percentage points for 2025 and 0.4 points for 2026.
The probability businesses assign to global GDP growth falling below 2% in 2025 declined by 20 percentage points since April, now standing at 38%.
Trade tensions continue to dominate corporate concerns. In the latest survey, 78% of respondents identified a global trade war as a very significant risk over the next two years, up from 71% three months earlier.
Other geopolitical risks such as Russia-NATO tensions and China-Taiwan developments were cited less frequently.
Businesses assign roughly equal probabilities, about one in three, to Oxford Economics’ three alternative scenarios: a worst-case trade war with expanded tariffs and retaliatory measures, a best-case scenario where tariffs are lowered, and a market correction driven by tighter financial conditions.
Expectations for monetary easing remain modest. On average, respondents foresee only two to three additional 25-basis-point interest rate cuts from the U.S. Federal Reserve by the end of 2026, about half the easing projected in Oxford Economics’ baseline. Businesses also expect significantly less easing from the Bank of England.
The survey covers a broad range of sectors and regions, with the largest shares from financial institutions and industrial manufacturing.
Europe and North America accounted for most responses, with 22% of firms identifying as multinational.