The report assesses the economic situation finding the global economy remained resilient in 2024, expanding at a solid annualised pace of 3.2% through the second half of the year. However, recent activity indicators point to a softening of global growth prospects. Business and consumer sentiment have weakened in some countries. At the same time, policy uncertainty has been high and significant risks remain. 

The report outlines recent developments, projections, risks and challenges, and policy requirements.

Key findings

• Global growth is projected to moderate.
• Inflationary pressures continue to linger in many economies.
• Further trade fragmentation of the global economy is a key concern and would harm global growth prospects.
• Higher-than-expected inflation would prompt more restrictive monetary policy and could give rise to disruptive repricing in financial markets.
• Agreements that lower tariffs from current levels could result in stronger growth.

Recommendations

• Central banks should remain vigilant given heightened uncertainty and the potential for higher trade costs to push up price and wage pressures.
• Decisive fiscal actions are needed to ensure debt sustainability, preserve room for governments to react to future shocks and generate resources to meet large impending spending pressures.
• Ambitious structural policy reforms are needed to improve the foundations for growth.