Analysis

The world economy remained resilient in 2024, expanding at a solid annualized rate of 3.2% during the second half. However, recent activity indicators point to a weakening of global growth prospects. Business and consumer confidence has weakened in some countries. Inflationary pressures persist in many economies. At the same time, political uncertainty has been high and significant risks remain. Greater fragmentation of the world economy is a key concern. Higher-than-expected inflation would drive more restrictive monetary policy and could lead to disruptive revaluation in financial markets. On the positive side, agreements to reduce tariffs from current levels could generate higher growth….