IIF Projects World Economy Will Decelerate in 2025
World economic growth is projected to slow to 2.7% in 2025, down from 2.9% in 2024, Anadolu Agency reported citing a forecast released by the International Institute of Finance (IIF) on Wednesday.
The IIF anticipates that the average GDP growth rate for mature markets will decrease to 1.3% in 2025, compared to 1.5% in 2024. Specifically, the growth outlook for the United States is set at 1.9%, while the euro area is expected to see just 0.6%. In contrast, emerging markets (EMs) are forecasted to grow by 3.8%, with Russia at 1.7%, Türkiye at 2.5%, and China at 4.2%.
The institute also predicts a drop in capital flows to EMs, estimating them to fall to $716 billion in 2025 from $944 billion in 2024, primarily due to reduced inflows to China. In 2024, China experienced its first net foreign direct investment outflows in decades, with a similarly bleak outlook for 2025. Capital flows to non-China EMs are expected to decrease to $781 billion in 2025 from $824 billion in 2024. Additionally, geopolitical tensions and U.S. energy policies are likely to create uncertainty in commodity prices.
