Global growth for 2025 is expected to moderate at 2.4 per cent, down from 2.6 per cent in 2024 according to Fitch ratings. The US economic expansion is projected to slow to 1.5 per cent, while China’s growth is expected to decelerate to 4.5 per cent due to declining exports. However, the eurozone is forecasted to see an uptick in growth to 1.5 per cent next year. Fitch predicts a slight deceleration in China’s growth to 4.5 per cent as export growth slows and fiscal support wanes.
For 2024, Fitch has revised the outlook upwards for the eurozone significantly, with growth projections raised by 0.2 percentage points to 0.8 per cent. China’s growth for 2024 has also been revised upwards to 4.8 per cent from 4.5 percent. Real wages in the eurozone are rising, boosting household spending and stabilizing the region’s recovery. In contrast, the United States is expected to see growth of 2.1 per cent in 2024, with household incomes rising and strong financial buffers mitigating risks.
The global monetary policy landscape is undergoing changes as central banks shift towards easing. The ECB has cut rates, and the Federal Reserve and BoE are expected to follow suit. However, persistent inflation may slow the pace of rate cuts. Fitch anticipates global rates will decline gradually over the next 12-18 months. The recovery in Europe is supported by a reversal of earlier economic shocks, while the US economy is experiencing a gradual slowdown.
In India, the RBI has revised growth for FY25 upwards at 7.2 per cent, citing balanced risks and robust economic performance. GDP growth is expected to remain around 7.2-7.3 per cent throughout the year. This demonstrates a positive outlook for India’s economy compared to other global projections. Overall, while global growth is expected to moderate in 2025, various regions are showing signs of recovery and stability in their economic performance.
