Page 6 - Policy Economic Report - December 2025

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

Economy in Focus

1. A snapshot of the global economy

Global economic growth
2025 has been a year of steep ups and downs for the global economy—at least where growth forecasts
have been concerned. According to World Bank estimates, global growth is projected at 2.7 percent—
broadly in line with expectations at the start of the year.

In 2025, the United States experienced the largest swing in growth expectations among the major
economies, with forecasts falling from 2.2 percent in January to 1.2 percent in May before recovering to
2.0 percent by November. This rebound reflected strong AI-related investment, lower interest rates,
continued fiscal support, and modest tariff pass-through.

Across other advanced economies, projected growth has returned to 1.4 percent—up from 1.0 percent
in May and close to January levels—with the euro area benefiting from easing inflation, declining interest
rates, and targeted fiscal measures.

Growth prospects for EMDEs excluding China have remained stable at around 3.5 percent, while
expectations for China have improved as policy support helped offset weakness in the real-estate sector.

The revision to U.S. growth forecasts since May remains the largest single driver of the global upgrade,
accounting for 37 percent of the improvement in global prospects. Upgrades for other advanced
economies explain 32 percent, while China’s improved growth outlook contributes 23 percent.

Figure 1: Monthly growth forecast for 2025

Source- World Bank Page | 5

November 2025