The latest forecast from the International Monetary Fund suggests global economic growth will remain steady, with a projected growth rate of 3.2 percent in 2025.
Growth rates for developed economies and emerging markets are expected to be 1.8 percent and 4.2 percent, respectively, unchanged from the previous year.
However, the IMF also highlighted significant downside risks to the economic outlook, including the escalation of geopolitical conflicts that could further disrupt energy markets, the adoption of harmful trade and industrial policies by various countries, prolonged tightening of monetary policy, and the possibility of a sudden tightening of global financial conditions. US President Donald Trump's administration will also be a key factor influencing the global economic outlook.
On the one hand, under a weak global economic backdrop, energy price growth is likely to slow down, and US rental prices may lead to a decline in housing inflation. As a result, US inflation is expected to continue to ease, and the US Federal Reserve is likely to continue interest rate cuts. However, the Trump administration's fiscal expansion, immigration policies and trade practices could pose a risk of inflation rebound, limiting the Fed's ability to reduce rates further. If the Fed maintains restrictive monetary policies for an extended period, it could increase the downside risks to the US economy and raise uncertainties around a "soft landing".
On the other hand, during his campaign, Trump threatened to impose high tariffs on all imports, with particularly aggressive trade policies toward China. Such tariff policies have already triggered retaliatory measures, and could trigger more from other countries, severely impacting global trade growth.
Source:China Daily
