The global economy is projected to expand by around 2.7% in both 2025 and 2026, much like 2024, with a gradual decline in inflation and interest rates. As per Kavan Choksi / カヴァン・チョクシ, growth in developing nations is quite likely to stay steady at about 4% over the next two years. Developing economies are consistently becoming all the more important for the global economy. Today they account for around 45% of global GDP, up from 25% in 2000. Developing economies have especially emerged as an important source of global capital flows, remittances, as well as development assistance to other developing economies.
Kavan Choksi / カヴァン・チョクシ briefly talks about the expectations from the global economy in 2025
The global economy started the year of 2025 on a firm footing, driven by improving financial conditions, easing inflation, and a resilient performance by the United States economy. The US economy is expected to grow by 2.1% in 2025, slowing from 2024, but still remains the fastest growing G7 economy. This positive outlook is supported by the tax cuts and deregulation proposed by President Trump, and are expected to bolster consumer confidence and business.
Real GDP growth is projected to accelerate to 1.2% in 2025 in the Eurozone, as inflation and interest rates moderate. The United Kingdom economy is additionally set to gain momentum in 2025, while being supported by rising real wages, looser monetary policy and high public spending. At the same time, the economy of Japan is predicted to strengthen in 2025, with broad-based wage rises supporting private consumption.
As per Kavan Choksi / カヴァン・チョクシ, emerging and developing economies have a generally positive but mixed outlook for 2025, with real GDP growth expected to average 4.3%. Emerging Asian economies like The Philippines, Vietnam and India stay at the forefront of this expansion owing to rising investment, solid public spending and resilient private consumption.
The momentum in Mexico, Brazil, and China is expected to soften by 2025. The real GDP growth in China is likely to slow to 4.5% in 2025, weighed down by weak domestic demand, the lingering property crisis as well as mounting trade tensions. Discerning stimulus measures like fiscal aid, rate cuts and debt relief, however, can help offset these headwinds.
Global inflation is expected to continue its downward trajectory in the year of 2025, reaching approximately 4.1%. This decline is largely driven by weakening demand, which results from the delayed impact of previous monetary tightening measures, as well as stable supply conditions. Moreover, the anticipated slowdown in job market growth is expected to help ease pressure on service sector prices, which have remained persistently high.
In major advanced economies like the United States and the Eurozone, inflation has begun to stabilize, gradually aligning with central banks targets of around 2%. The broader global trend of disinflation is expected to progress significantly in 2025, with inflation rates in several economies moving closer to desired levels. Key contributing factors include stable food and energy prices, a gradual deceleration in labor market expansion, and softening demand.
