Business sentiment towards the global economy is showing some recovery after tariff tensions eased, with recession risks receding but growth expectations still weak, according to Oxford Economics.
The June Global Risk Survey, conducted between May 28 and June 10 and involving 106 companies, found the probability of a global recession this year had fallen below 15%, down from over 25% in April.
While April’s pessimistic outlook has reversed, expectations for global economic growth remain lower than at the start of the year. The Oxford Economics Global Business Sentiment Index now expects growth of 1.5% by the end of 2025, 0.3 percentage points below the organization’s baseline forecast.
Only 10% of respondents reported a significantly more negative view of the global growth outlook last month, down from 51% in April. While more companies are starting to show a more positive outlook, the report said that significant improvement is still limited.
The number of companies that see global economic risks as biased to the negative also fell, now below 10%, down from 36% in April. The change is in line with Oxford Economics’ revised baseline forecast, which reduced its global growth forecast by 0.2 percentage points for 2025 and 0.4 points for 2026.
The probability that companies give of global GDP growth falling below 2% in 2025 has fallen by 20 percentage points since April, now standing at 38%.
Trade tensions remain a top corporate concern with 78% of respondents describing a global trade war as a very high risk over the next two years, up from 71% three months earlier. Other geopolitical risks such as Russia-NATO tensions and the China-Taiwan issue were mentioned at lower rates.
The company gave a roughly equal probability of around one in three of three alternative scenarios by Oxford Economics: a worst-case scenario involving a trade war with additional tariffs and retaliation, a best-case scenario with tariff reductions, and another scenario of a market correction due to tighter financial conditions.
Expectations for monetary easing remain modest. On average, respondents expect just two to three 25 basis point interest rate cuts by the US Federal Reserve by the end of 2026, about half of what is expected in Oxford Economics’ baseline forecast. The company also expects much less easing from the Bank of England.
The survey is cross-sectoral and regional, with the largest participation from financial institutions and the manufacturing sector. Europe and North America account for the majority of responses, while 22% of companies identify as multinationals.
