The World Bank has projected a significant slowdown in global GDP growth to 2.3% for 2025, marking the weakest performance since 2008, while the OECD has also revised its forecasts down to 2.9% for both 2025 and 2026, citing rising trade barriers and inflation concerns.

This slowdown is compounded by significant fiscal pressures globally, driven by rising interest rates and high government spending, which are forcing adjustments in economic activity across various regions.

The IMF warns that global public debt is set to surpass its pandemic-era peak, exceeding 100% of GDP, with major economies like the US, China, and Brazil expected to see increasing debt burdens this year.

In advanced economies, the OECD predicts that average debt burdens will rise to 114% of GDP by 2026, largely due to increased borrowing for defense and other pressing needs, while efforts for significant debt reduction are being postponed.

Amidst these challenges, chief economists in advanced economies are shifting their focus towards debt sustainability, reflecting growing concerns about rising debt levels.

In the United States, the implications of President Trump's tax bill are projected to increase annual budget deficits to 6.9% of GDP, with national debt potentially reaching 125% of GDP by 2034.

Sovereign bond yields have risen sharply, indicating increased risk as investors withdraw from government debt; in the US, 30-year Treasury yields have surpassed 5%, and Moody's has downgraded the country's debt rating.

Similarly, in Japan, 30-year bond yields have jumped from 2.3% to 3.2% in a matter of months, which poses significant risks given the nation's staggering debt level of around 250% of GDP.

Emerging and low-income economies, particularly in Africa, are facing challenges with rising external debt repayments as aid inflows decline, threatening investments in critical sectors such as health and education.

In response to these economic pressures, the African Economic Outlook has adjusted its growth forecast for Africa to 3.9% in 2025, although some countries are still expected to achieve growth rates exceeding 5%.

In a bid to adapt to heightened global uncertainty, countries in ASEAN, GCC, and China have announced plans for deeper financial integration, signaling a shift in global economic strategies.

Manufacturers worldwide are rethinking their operations in light of tariffs and supply chain disruptions, emphasizing diversification and regionalization rather than merely cost-cutting.