Page 8 - Policy Economic Report_Jan 25

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

Global Inflation

? Global headline inflation is expected to decline to 4.2 percent in 2025 and to 3.5 percent in 2026,
converging back to target earlier in advanced economies than in emerging market and developing
economies.

? Nominal wage growth is showing signs of moderation, alongside indications of continuing
normalization in labor markets. Although core goods price inflation has fallen back to or below
trend, services price inflation is still running above pre–COVID-19 averages in many economies,
most notably the United States and the euro area.

Global PMI

? The J.P.Morgan Global PMI Composite Output Index - produced by S&P Global - registered 52.6 in
December 2024, up from 52.4 in November 2024. The latest reading was the highest in four
months and signaled a pace of growth consistent with a growing global economy.

? The latest expansion remained uneven, with growth limited to the service sector while
manufacturing output contracted for the first time in three months. The latest downturn in the
goods producing sector reflected a lack of demand for goods, particularly export demand, amid
concerns over the impact of potential US tariffs on global trade.

? By region, developed market growth accelerated in December, driven mainly by improvements in
the US. Although marginal output gains were also reported in Japan, UK and Australia, other major
developed economies reported largely stalled growth.

? Across emerging markets, growth remained broad-based but decelerated from November. India
remained the leader among the BRIC economies, while the rest witnessed output growth cooling
into the end of year, with mainland China notably reporting only modest growth and the weakest
output expansion for three months.

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