ALARYAN.com: Growth on Divergent Paths Amid Elevated Policy Uncertainty

Global economic outlook takes a slightly revised course for 2025 and 2026, with projected growth rates of 3.3 percent in both years, lower than the historical average of 3.7 percent during the period between 2000-2019.

The forecast has remained largely unchanged from its October 2024 World Economic Outlook (WEO), primarily due to an upward revision for the United States which is countered by downward revisions in other major economies.

However, policymakers remain cognizant of shifting risks that pose challenges to their forecasts. A confluence of factors in both domestic and international spheres contributes to this uncertainty, casting a cloud on near-term prospects.

The World Bank warned of possible disruptions arising from elevated policy measures which could potentially reverse the growing trend toward reduced inflationary pressures. These concerns center on fiscal sustainability and financial stability issues that emerge when monetary policy starts easing up its pace.

In order to effectively navigate through these uncharted areas, policymakers are directed towards balancing key priorities such as managing economic tradeoffs between inflation and real activity levels, rebuilding financial buffers, increasing medium-term growth potentials by adopting structural reforms and supporting stronger multilateral regulatory systems.