It's not all doom and gloom in the pages of the world’s business press today, with the Financial Times taking a break from ringing the alarm bell of a brewing trade war to explore five more optimistic scenarios for the world economy in the year ahead.

#1- There’s hope that Trump’s bark may be louder than his bite when it comes to tariffs, with the prospect that approval ratings — Trump’s Achilles heel — could fall in tandem with rising inflation, pushing the administration to change course. Even modest adjustments — such as exemptions, extended timelines, or more structured trade negotiations — could significantly improve global growth forecasts.

#2- Don’t rule out a surprise in European growth, with governments loosening their purse strings, European stock rallies, and US tariffs pushing businesses and consumers to act locally presenting the possibility of some surprise growth statistics to come. On top of this, an uptick in European defense spending could help drive growth and lead to some unexpected R&D breakthroughs that could pay off down the line. The salmon-colored paper also points to what is hopefully a fast-approaching ceasefire in Ukraine, which should raise market and investor sentiment and bring down energy prices.

#3- Even with a slowdown elsewhere, China has the potential to push global growth rates, with the world’s factory continuing to hit its 5% y-o-y growth targets, beating analyst forecasts. A rising private sector and increased investor appetite for the county’s tech sector bodes well for the future, with an increasingly flexible policy line coming from the Communist Party of China. Beijing’s growing needs for raw materials, components, and goods from other countries could stabilize global growth expectations, which could be particularly important in a scenario where US tariffs and trade policies create headwinds for global growth.

#4- The US economy could still hold up despite aggressive tariffs — deregulatory measures like the potential extension of the Tax Cuts and Jobs Act could potentially boost consumption and investment, with the Tax Foundation estimating a 1.1% increase in long-term economic output as a result. Regardless, the immediate effects of tariffs may not be as harsh as anticipated, with US importers expected to face challenges as they scramble to transition to domestic suppliers.

#5- Central banks may have more wiggle room than meets the eye. Experts watching the labor markets are spotting early signs that the tight job market is finally starting to ease, suggesting that wage-driven inflation pressures could lift faster than expected, creating room for interest rate reductions without compromising price stability.

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