Trade disputes drive revised outlook as pressure mounts on US and China, says the Spanish insurer’s in-house think tank.

MAPFRE Economics has revised its 2025 global growth forecast down to 2.7%, citing mounting international trade tensions and new US tariff policies as key drivers of economic deceleration.

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The Madrid-based international insurer’s research unit had previously forecast 3.1% growth for the year.

In its updated “Economic and Industry Outlook” report, MAPFRE Economics warns that the fallout from tariff disputes is creating a more fragmented and cautious global environment, with central banks struggling to steer through a landscape of diverging fiscal responses.

The most pronounced slowdown is forecast for the United States, where GDP growth is now expected to reach 1.9% in 2025, down from an earlier 2.5%.

The US Federal Reserve faces heightened price pressures, with inflation forecast at 3% for this year and 2.6% for next.

“The main macroeconomic variables will continue to be exposed to the effects of trade disputes,” MAPFRE Economics stated, noting that much will depend on policy decisions taken over the coming months.

Europe is expected to face a milder impact. Stimulus measures, particularly in Germany, are likely to buffer the eurozone, with growth forecast at 0.8% this year and 1.1% in 2026. Inflation in the bloc is projected at 2.1% in 2025 and 1.8% the following year.

Emerging economies will also feel the strain, though with more mixed outcomes. Latin America, particularly Mexico, faces both challenges from reduced US demand and opportunities from diverted trade and capital inflows. The region is forecast to grow by 2.1% in 2026, with inflation easing to 8%.

Asia Pacific faces more acute disruption, especially China. The region’s growth outlook for 2025 has been cut to 4.3%, with China’s own forecast reduced to 4%. MAPFRE warns of less conciliatory rhetoric in the region, increasing the risk of prolonged economic friction.

Despite the global slowdown, the insurance industry remains resilient. MAPFRE Economics expects life insurance premiums to rise by 4.3% and non-life business to grow by 3.9% this year. High interest rates and moderate inflation are expected to sustain earnings, supported by financial income and demand for savings-linked products.

“Economic growth and interest rates will continue to drive the development of the global insurance industry,” the report added.

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