2025 In Review
- Aaron Kolkman
- 3 days ago
- 2 min read
Updated: 3 days ago
2025 was a year of transition. The 2025 global economy was characterized by a general slowdown in growth amid heightened policy uncertainty and trade tensions, though it proved more resilient than initially feared. Key trends included moderating global inflation (with the US as an outlier), a divergence in economic performance between regions, and significant risks related to trade policies and geopolitical events.
Global Economic Growth and Inflation
Global GDP growth for 2025 was projected by the IMF to be around 3.2% (as of October 2025) and by the OCED to slow to 2.9% (as of December 2025). Projections were volatile throughout the year due to shifting policies and uncertainties. Global headline inflation was expected to decline from 2024 levels, but remain a concern in many regions.
Metric | IMF Forecast (Oct 2025) | OECD Forecast (Dec 2025) |
Global GDP Growth (2025) | 3.2% | 2.9% |
Global Inflation (2025) | 4.5% | 4.2% |
US GDP Growth (2025) | 2.0% | 2.0% |
China GDP Growth (2025) | 4.5% | 5.0% |
Key Points
Trade Tensions & Uncertainty: Escalating trade barriers and policy uncertainty were major themes, dampening investment and trade growth globally. The full impact of U.S. tariffs was expected to feed through gradually, weighing on activity in late 2025 and 2026.
Divergent Monetary Policy: Central banks in most regions began to ease monetary policy as inflation moderated, but the U.S. Federal Reserve maintained a more cautious approach due to persistent domestic inflation concerns, keeping rates steady for much of the year.
AI Investment and Resilience: Strong investment in artificial intelligence (AI) infrastructure and resilient consumer spending in some major economies, particularly the United States, provided unexpected buffers against a steeper downturn.
Fiscal Pressures: Many countries faced constrained fiscal space due to high debt and rising interest payments, limiting their ability to implement counter-cyclical spending measures.
For further information, refer to the IMF World Economic Outlook or the OECD Economic Outlook reports.
Weekly Verse: And he said to them, “Take care, and be on your guard against all covetousness, for one's life does not consist in the abundance of his possessions.” - Luke 12:15 (ESV)
References:
English Standard Version Bible, 2001, Luke 12:15 (ESV)
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