Global Economy: Stable Recovery with Increased Divergence

The global economy is undergoing a gradual recovery in 2024, though growth momentum remains weak. Looking ahead to 2025, global economic growth is expected to remain stable but with widening disparities across regions. Inflation is projected to continue its downward trajectory, while labor markets are expected to remain relatively stable. Fiscal policies worldwide are anticipated to return to normalized pathways, while monetary policies are likely to maintain their accommodative stance.

Global trade is expected to recover, driven by easing supply chain pressures and the restructuring of supply and value chains. Cross-border investments are also projected to gradually rebound, though flows will likely exhibit pronounced regional disparities. However, the global growth outlook remains subject to downside risks, particularly geopolitical uncertainties and potential policy shifts from the new U.S. administration, which could significantly impact the recovery trajectory.

The global economy demonstrated resilience in 2024, with the IMF estimating a growth rate of 3.2%, marking the slowest five-year growth span in over three decades. For 2025, growth is expected to remain modest at 3.2%, reflecting lingering scars from the pandemic, such as exacerbated inequality, rising public debt burdens, and disrupted globalization processes.

Global inflation pressures continued to ease in 2024, with the IMF forecasting a CPI increase of 5.8%, down from 2023. In 2025, inflation is expected to decline further, driven by slower demand growth and easing fiscal policies. However, geopolitical risks and protectionist policies could limit the extent of disinflation.

Global trade began to recover in 2024, with the WTO estimating a 2.7% increase in merchandise trade. For 2025, trade growth is expected to rise to 3.0%, supported by accommodative monetary policies and lower inflation. However, geopolitical tensions and protectionist measures may create new trade barriers, altering trade dynamics.

Foreign direct investment (FDI) is also showing signs of improvement, growing 25% year-on-year in the first half of 2024. The rebound is expected to continue modestly into 2025, though geopolitical influences will lead to more fragmented investment flows.

Fiscal policies globally have moved towards normalization, with developed economies maintaining a fiscal deficit-to-GDP ratio of 2.7% in 2024. Emerging economies, meanwhile, showed slightly more accommodative stances. Monetary policy began a notable shift in 2024, with central banks in developed economies initiating rate cuts. This trend is expected to persist in 2025, though the pace and extent of monetary easing will vary significantly by region.