Page 6 - Policy Economic Report_Feb'25

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

Economy in Focus

1. A snapshot of the global economy

Global economic growth

According to World Bank, the world economy has shown remarkable resilience, with global growth
projected at 2.8 per cent in 2025, the same as in 2024, and 2.9 per cent in 2026. This stability has been
underpinned by continued disinflation, softening commodity prices, and monetary easing in many
countries.

However, ongoing conflicts, geopolitical tensions, and potential trade restrictions, as well as climate risks
pose significant challenges going forward. The global economy is set to grow at a slower pace than the
pre-pandemic average of 3.2 per cent recorded between 2010 and 2019, reflecting ongoing structural
challenges such as weak investment, slow productivity growth, high levels of debt, and demographic
pressures.

Figure 1: GDP growth projections for 2025

Source- World Bank

• Economic growth in the United States is projected to moderate from a robust 2.8 per cent in 2024
to 1.9 per cent in 2025, amid weaker labor market performance and looming public spending cuts.

• Economic growth in China is expected to remain just below 5 per cent in the coming years,
constrained by subdued consumption growth, ongoing weakness in the property sector, and the
challenges posed by a shrinking population and rising trade tensions.

• Japan and Europe are forecast to experience modest economic recovery in 2025 and 2026,
following weaker-than-expected growth in 2024.

February 2025 Page | 5