According to reports analyzed by the Information and Decision Support Center of the Egyptian Cabinet, global economic growth is expected to slow significantly in 2025. This slowdown is attributed to U.S. tariff policies and declining global demand, alongside differing monetary and fiscal policies across countries. Morgan Stanley’s report, titled “Mid-Year 2025 Economic Outlook: Broad-Based Slowdown,” highlights that global economic growth is projected to fall to an annual rate of 2.9% in 2025, down from 3.3% in 2024. This decline is primarily driven by a slowing U.S. economy, which impacts other nations worldwide, making 2025 the weakest growth year since the COVID-19 pandemic.
The report also notes that new U.S. trade policies, particularly tariff increases, have structurally shocked the global economy. This has led to global demand restrictions amid ongoing uncertainty. Although trade negotiations may continue, full tariff removal is unlikely, keeping global trade tensions high. Inflation is expected to decrease in most countries, except the U.S., where tariffs could raise consumer prices, peaking between 3% and 3.5% in Q3 2025. Global inflation is forecasted to reach 2.1% in 2025 and 2% in 2026.
Central banks in most countries may cut interest rates due to slowing growth and inflation. However, the U.S. Federal Reserve is expected to maintain rates until March 2026. Governments in the U.S., Europe, and China are likely to increase public spending to stimulate growth, raising deficits, especially in Germany and the U.S. The U.S. economy is expected to slow from 2.8% growth in 2024 to 1.5% in 2025 and 1% in 2026, influenced by immigration restrictions, policy uncertainty, and higher tariffs.
In the Eurozone, weak exports remain the main growth barrier, with the European economy projected to grow by 1% in 2025, up from 0.8% in 2024. Japan may benefit from improved household incomes due to wage increases and slowing inflation, supporting consumer confidence and maintaining economic growth at 1% in 2025 and 0.5% in 2026. India remains the fastest-growing major economy globally, with growth forecasts of 5.9% in 2025 and 6.4% in 2026, driven by domestic demand and supportive economic policies.
— new from (publisher: إقرأ نيوز)