While early 2025 saw a boost in activity, these effects are waning, contributing to the current slowdown.

Trade growth has slowed to 2.9% in 2025, down from 3.5% in 2024, reflecting broader economic deceleration.

Advanced economies are expected to grow at about 1.5% in 2025, with the U.S. slowing to 2%, while emerging markets and developing economies will see slightly above 4% growth, hindered by weak demand, fragmented trade, and policy uncertainties.

The global economy is experiencing a slowdown, with growth projected to decline from 3.3% in 2024 to 3.2% in 2025, and further easing to 3.1% in 2026, with a notable slowdown in year-end growth from 3.6% to 2.6%.

The International Monetary Fund warns that the global economy is entering a period of increased uncertainty, marked by slowing growth and rising risks as of October 2025.

Major risks include protectionism, fiscal pressures, labor constraints, and financial vulnerabilities, such as debt concerns and potential shocks, particularly in technology sectors tied to artificial intelligence.

The IMF underscores the importance of predictable, rules-based policies, fiscal discipline, and independent central banks to maintain market confidence and stability.

Opportunities for stability lie in easing tariffs through trade negotiations, implementing structural reforms, enhancing labor mobility, and strengthening institutional capacity.

Businesses should adopt flexible, scenario-based planning to navigate uncertainties related to policy shifts, trade patterns, inflation, and labor availability.

Despite some early 2025 growth due to front-loaded trade and inventory strategies, recent data reveals underlying fragility, emphasizing the need for disciplined policy and strategic planning.

Supply chain disruptions from tariffs, restrictive immigration policies, and reduced development aid threaten to reduce productivity and labor supply, especially in aging populations and countries facing skill shortages.