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U.S. recession no longer likely after trade truce, says Barclays
Barclays noted it still expects a technical euro zone recession in the second half of 2025, but with growth contracting by less than previously forecast.
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Reuters - Fri, 16, May 2025
- 03:26 EDT
- 67
The Manhattan skyline is seen from Queens, New York City, U.S., April 28, 2025. / REUTERS/Kylie Cooper/File Photo
Barclays no longer expects the U.S. economy to slip into a recession later this year and has revised up its growth forecasts, given signs of a de-escalation in U.S.-China trade tensions, the bank said in a note released late May 15.
Barclays said it now expects the U.S. economy to grow 0.5 percent this year and 1.6 percent next year, up from previous forecasts of -0.3 percent and 1.5 percent, respectively.
Reduced uncertainty and an improved economic backdrop also led Barclays to lift its euro area growth expectations. It now forecasts flat economic growth this year, compared to a 0.2 percent contraction previously.
Barclays noted it still expects a technical euro zone recession in the second half of 2025, but with growth contracting by less than previously forecast.
"Overall, we remain downbeat about the growth outlook in the euro area because uncertainty remains very elevated and the negotiations on reciprocal tariffs between the European Union (EU) and the U.S. remain at a technical level and there are no signs of progress," Barclays said in a note.
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