Global Economy Faces Slower Growth Amid Policy Shifts

The global economy growth outlook remains uncertain as new policy measures reshape trade and investment flows.
Recent tariff adjustments brought some relief after earlier extremes. However, volatility continues, and short-term drivers of growth, such as early demand boosts in 2025, are now fading.

Global Economy Faces Slower Growth

According to the latest World Economic Outlook (WEO), growth projections have improved slightly since April 2025.
Yet, they remain lower than before recent policy shifts. Global growth is expected to slow from 3.3% in 2024 to 3.2% in 2025 and 3.1% in 2026.
Advanced economies are set to expand by around 1.5%, while emerging markets may grow just above 4%.
Inflation is easing across many regions. However, it remains above target in the United States, where risks lean upward.
Elsewhere, inflation is subdued, reflecting weaker demand and tighter monetary policy.

Policy Reforms and Global Risks

Risks to global economy growth remain tilted downward.
Rising protectionism, shrinking labor supply, and uncertain fiscal conditions could weigh on output.
In addition, financial market corrections and weakening institutions may threaten overall stability.
Policymakers are urged to act with transparency and long-term vision.
They must rebuild fiscal buffers, strengthen institutions, and preserve central bank independence.
In addition, trade diplomacy should align with macroeconomic reforms to restore investor confidence.
Experts also recommend renewed efforts in structural reforms.
As past experiences show, solid policy frameworks can protect economies during downturns.
While industrial policy can help, it should balance innovation with opportunity costs and sustainability.
In short, global leaders must focus on credibility, cooperation, and adaptability to navigate an era of slower yet stabilizing growth.