Global economic growth will slow to 3.2 percent next year, compared to 3.3 percent forecast in July. This emerges from the latest global economic outlook from the International Monetary Fund (IMF). The IMF warns of a significant increase in downside risks to the global economy, which are primarily reflected in the intensification of geopolitical conflicts, trade protectionism and other diverse risks. Among other things, economic growth in the euro zone is expected to be 1.2 percent in 2025, while the forecast in July was 1.5 percent.
Many analysts expect the new US administration, the EU’s largest trading partner, to increase the likelihood of reciprocal trade measures from all parties as it implements its plans to increase tariffs.
Zac Meyers, deputy director of the Center for European Reform think tank, said the EU could face huge new tariffs on US exports while being dragged by the US into a trade and technology war with China.
Moritz Schularick, director of the Kiel Institute for the World Economy, described Trump’s second presidency as the “most difficult economic moment” in German post-war history and argued that the country was “not prepared” for the coming challenges in foreign trade and security policy.
Against the backdrop of insufficient growth momentum in the global economy, the frequent industrial and trade policy measures to protect the domestic economy will disrupt global industrial and supply chains and deal a serious blow to world trade. If major economies overcome their differences and work together, they will not only maintain the stability of the global economy but also be able to address pressing global challenges.
