QHML

Key Indicators & Outlook

Growth

According to the IMF World Economic Outlook (July 2025 update), global growth is projected at 3.0 % in 2025 and 3.1 % in 2026.

The Conference Board also expects global real GDP growth of about 3.0 % in 2025 and ~2.9 % in 2026.

The OECD forecasts a somewhat slower pace: around 2.9 % for both 2025 and 2026.

The World Bank, more pessimistically, projects global growth of 2.3 % in 2025, citing rising trade barriers, weakening investment, and external headwinds.

The United Nations estimates growth around 2.8 % in 2025 (similar to 2024 levels) in its “World Economic Situation & Prospects” report.

So there is some variation across forecasts, but most agencies converge on a global growth rate in the 2.5 % to 3.1 % range in 2025.

Major Economies & Their Roles

The United States remains the largest economy by nominal GDP.

China is second in nominal terms, but leads in purchasing-power parity (PPP) metrics in many comparisons.

In 2025, India is projected to continue being one of the fastest growing among large economies.

Other important economies (Germany, Japan, the European Union) face slower growth, with structural challenges, demographic pressures, and less scope for fiscal expansion in many cases.

The relative share of emerging and developing economies in global output continues to grow, but many face significant headwinds (e.g. debt burdens, weak investment, inflationary pressures).

Trends & Structural Dynamics

Trade & Protectionism

Rising trade barriers, tariff disputes, and geopolitical frictions are introducing distortions and uncertainties into global trade flows.

Some of the growth “buffering” in 2025 reflects front-loading—firms accelerating orders ahead of tariff changes.

Debt & Fiscal Constraints

Many countries, especially emerging markets, are operating under limited fiscal space due to high public debt and borrowing costs.

The IMF has warned that global government debt could reach 100 % of global GDP by 2029, highlighting risks to financial stability.

Monetary Policy & Inflation

After years of interest rate hikes to fight inflation, central banks in many economies face the challenge of timing rate cuts.

Inflation, although cooling in many places, remains elevated above pre-pandemic norms in several countries.

Technological Change & AI Investment

Investment in AI and related technologies is seen as a potential growth booster, especially in advanced economies, helping offset some weakness in other sectors.

However, there is concern about overinvestment, speculative bubbles, and mismatches between hype and real productivity gains.

Divergence & Uneven Recovery

Growth divergence between developed, emerging, and low-income countries is increasing.

For many low‐income countries, per capita income growth is insufficient to close gaps created by the pandemic.

Regions like Asia, particularly South Asia, are expected to outperform, driven by strong domestic demand, demographic advantages, and structural reforms.

Climate, Energy & Sustainability

Climate risks, extreme weather, and energy transitions impose constraints and costs, especially for vulnerable economies.

The push for “green growth” and clean energy investment will be a growing factor in shaping future growth patterns.

Risks & Downside Threats

Escalation of trade wars (e.g. U.S.–China) could knock off as much as 1 point or more from global growth by later years.

Debt crises in emerging markets, especially those with high foreign currency exposure, remain a serious concern.

Global financial instability—e.g. sudden shifts in interest rates, capital flow reversals—could hit fragile markets.

Slower investment and productivity stagnation could lead to prolonged “secular stagnation” dynamics.

Geopolitical conflicts, supply chain disruptions, and resource constraints (energy, water) may act as wildcards.

Overall Assessment

The global economy in 2025 is expected to grow, but at a moderate pace, with greater downside risks than upside surprises.

The resilience seen so far (despite tariffs, inflation, and geopolitical stress) has surprised some forecasters.

But structural challenges—debt, inequality, climate change, demographic shifts—remain long-term headwinds.

Regions and countries that can harness technology, improve institutions, manage debt, and adapt to climate constraints are better positioned.