Underlying Economic Conditions

The Organisation for Economic Co-operation and Development (OECD) described global economic output as surprisingly resilient in 2024. Economists there expect this resilience to continue in 2025. The OECD predicts that inflation will continue to fall and will move into line with central bank targets. Trade conflicts and protectionist stances, alongside geopolitical conflicts, could put pressure on economic growth. The effects would disrupt supply chains and drive consumer and energy prices up. Tight government budgets and sovereign debt levels in a number of countries could also leave their mark on economic growth. Against this backdrop, the OECD is predicting global gross domestic product (GDP) growth of 3.3 percent in both 2025 and 2026. The International Monetary Fund (IMF) expects the trade volume to decline worldwide due to the major uncertainty surrounding trade policy. Moreover, this would likely manifest in a reluctance to invest, especially at companies with a lot of foreign trade. The IMF, too, is predicting global GDP growth of 3.3 percent for 2025. Both organizations stress that the situation may vary considerably from region to region and country to country.