Global economic growth to decelerate by 2.7% in 2025
The entrance of the Institute of International Finance (IIF), where its logo is prominently projected onto a neutral wall. (Courtesy of IIF)
Global economic growth is expected to slow to 2.7% in 2025 from 2.9% in 2024, according to the International Institute of Finance’s (IIF) forecast released Tuesday.
The IIF projects an average gross domestic product (GDP) growth rate of 1.3% for mature markets in 2025, down from 1.5% in 2024.
The expectation for the U.S. was at 1.9%, 0.6% for the euro area, 3.8% for emerging markets (EMs), 1.7% for Russia, 2.5% for Türkiye and 4.2% for China.
Capital flows to EMs are forecast to decline to $716 billion in 2025 from $944 billion in 2024, driven by weaker flows to China, said the institute.
In 2024, China saw its first net foreign direct investment outflows in decades, with an equally disappointing forecast for 2025. Capital flows to non-China EMs will moderate to $781 billion in 2025 from $824 billion in 2024, the IIF said.
Geopolitical tensions and U.S. energy policies will add uncertainty to commodity prices, it noted.
