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Barclays sees US recession risk fading due to warming relations with China
Barclays has revised its US economic growth forecast upward, ruling out the possibility of a year-end recession. The bank's decision comes as trade tensions between Washington and Beijing ease.
Instead of the previously expected 0.3% contraction in US GDP this year, Barclays now forecasts 0.5% growth. For 2026, the bank has raised its estimate to 1.6%, up from 1.5%.
The improved macroeconomic outlook and reduced uncertainty have also prompted the financial institution to lift its eurozone economic growth forecast. The bank now anticipates a marginal GDP increase for the region this year, compared to its previous projection of a 0.2% contraction. While analysts caution that the eurozone may still experience a technical recession in the second half of 2025, they expect it to be less severe than initially expected.
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