Global Economic Outlook 2025: Experts Optimistic but Cautious Amid Volatility

The global economic outlook for 2025 looks promising, with experts projecting steady growth driven by lower inflation and wage growth. This positive forecast is expected to result in increased real income for individuals and heightened business confidence due to lower interest rates, according to analysts at Cordros Securities.

While the overall economic outlook seems optimistic, experts caution that potential risks could impact this trajectory. One major risk highlighted is the possibility of policy changes in the U.S. under a second Trump administration, which could introduce protectionist measures like tariffs and immigration restrictions. This could lead to inflationary pressures and uncertainty in monetary policy.

Volatility in commodity prices due to geopolitical tensions and climate change, the ripple effect from prolonged monetary policy tightening, and weaker economic activity in China are among other risks identified by analysts. In sub-Saharan Africa, economic performance is expected to improve with sustained structural reforms and growing consumer demand, although inflationary pressures may linger in countries like Nigeria, Ghana, and Angola.

Despite the resilience shown in the global economy in 2024, factors like tight monetary policy, geopolitical challenges affecting productivity growth, and property crises in China have dampened its growth momentum. However, the easing of inflation towards global central banks’ targets has led to a more accommodative monetary policy stance to support economic growth.

Looking ahead to 2025, experts anticipate a shift towards monetary policy easing, continued fiscal expansion, and increased productivity from technological innovations to boost global growth. However, risks such as trade protectionism, prolonged monetary policy tightness, geopolitical conflicts, climate change, and weaker-than-expected Chinese economic activities still pose challenges.

Global inflation is expected to slow down in 2025, mainly due to lower energy prices and tight monetary policies restricting wage growth. Despite these downward pressures, inflation is projected to remain above central banks’ targets due to ongoing global supply chain changes and wage pressures influenced by demographic shifts and stricter immigration controls.

GlobalData, a leading data analytics firm, also predicts a strengthened global economy in 2025 despite potential hindrances like trade tensions and geopolitical uncertainties. The firm remains cautiously optimistic about accelerated growth, emphasizing the impact of policy shifts on international trade and economic cooperation.

In conclusion, the global economic outlook for 2025 appears positive, with experts forecasting steady growth supported by various factors. While risks remain, the overall sentiment is one of cautious optimism in the face of potential challenges.