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POLICY AND ECONOMIC REPORT
               OIL & GAS MARKET

               • In Latin America and the Caribbean, GDP is projected to grow at 2.0 per cent in 2025, down from
                    2.2 per cent in 2024. Brazil’s growth is forecast at 1.8 per cent, slowing from 3.4 per cent in 2024,
                    as weaker household consumption, reduced fiscal stimulus and monetary tightening take a toll.

               • Small island developing States (SIDS) have seen a downward revision in growth to 3.1 per cent in
                    2025. Landlocked developing countries (LLDCs) are likely to experience limited near-term impacts
                    from the trade conflict due to their restricted access to international markets.

           Global inflation

           According to UN, global inflation is projected to moderate from 4.0 per cent in 2024 to 3.6 per cent in
           2025. However, the trend masks divergent regional dynamics.

               • In developed economies, inflation is projected to average 2.8 per cent, slightly above the 2.7 per
                    cent recorded in 2024, with risks of renewed upward pressures in the United States due to tariffs
                    on intermediate and final goods.

               • Developing economies are projected to see inflation fall to 4.7 per cent, but three quarters of
                    these economies will still experience rates above pre-pandemic levels. Food inflation remains
                    high, especially in developing countries, where conflict and climate shocks continue to disrupt
                    supply chains.

               • The United States Federal Reserve has been holding its policy rates steady, awaiting more
                    information on inflation and growth trajectories. The European Central Bank has lowered rates
                    amid easing inflation and stagnant growth. Many central banks in developing economies are
                    gradually easing monetary policies as inflation moderates. Brazil, however, has raised policy rates
                    to address persistent inflation.

           Global trade

           Global trade is projected to experience a sharp slowdown. Following a temporary surge driven by
           frontloaded shipments ahead of anticipated tariffs, growth in trade volume is projected to reach just 1.6
           per cent in 2025, down from 3.3 per cent in 2024. Falling prices for key commodities, including oil,
           industrial metals, and minerals, reflect subdued global demand, posing additional challenges for resource-
           dependent economies. Amid escalating protectionism and persistent policy uncertainty, the continuing
           erosion of the multilateral trading system risks further marginalizing small and vulnerable countries.

           In contrast, services trade remains resilient, buoyed by the rapid expansion of digitally deliverable
           services, which now account for 14 per cent of global exports. Sectors such as education, finance, and
           healthcare have benefited from the widespread adoption of artificial intelligence.

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