Global Growth Trajectory
Global economic growth is decelerating. Many forecasters project aggregate growth of between 2.9% to 3.2% for 2025, down from stronger performance in prior years. Advanced economies are bearing much of this slowdown, while many emerging markets—especially in Asia—are expected to outperform the global average, though not without their own headwinds.

Several forces are contributing to the deceleration. Tighter monetary policies in many jurisdictions, high real borrowing costs, slowing consumer demand, and persistent inflation all act as drags. Trade disruptions, whether via tariffs or supply-chain bottlenecks, further complicate the picture. In some major economies, real incomes are only just recovering, and business investment remains cautious.

Regional Breakdown and Sectoral Dynamics
In the United States, growth is moderating under the weight of past monetary tightening and reduced consumer spending power. In Europe, growth is being held down by energy costs, food inflation, and export weakness. In China, domestic demand and real estate continue to be points of concern, despite fiscal stimulus efforts. Meanwhile, many emerging Asian economies are expected to support global growth, though they too face threats from input-cost inflation and global trade dynamics.

What’s Next & Key Risks
The trajectory of global GDP will depend heavily on developments in interest rates, the easing (or worsening) of global supply shocks, and geopolitical risk. A sharper slowdown in China, or renewed conflict in key commodity regions, could worsen the outlook. On the flip side, if energy prices decline, real incomes recover, and trade tensions ease, there is scope for upside surprises. Investors should keep an eye on PMIs, capital flows, and trade volume data, while policymakers will be focused on infrastructure investment, fiscal stimulus, and labour market supports to avoid recessionary pressures.