According to The Economist, the IMF has sharply downgraded its global growth forecast to 2.8% for 2025, from an earlier projection of 3.3%, citing heightened trade tensions and unprecedented policy uncertainty.
Major economies including the US and the eurozone have all seen growth prospects revised downwards, with Germany expected to record zero growth.
Markets experienced another volatile week, heavily influenced by President Donald Trump’s public criticisms of Federal Reserve Chair Jerome Powell and his aggressive stance on trade with China.
After initial concerns about potential interference with the Fed, Trump reassured markets, leading to some stabilisation.
The dollar weakened significantly, and gold prices surged to record highs. Meanwhile, US tariffs on solar panels from Cambodia and other Asian countries have escalated trade frictions further. Logistic giant DHL has suspended certain shipments to the US due to stricter customs checks.
In the corporate sector, Tesla reported a sharp decline in both revenue and profit, partly due to Elon Musk’s close association with the Trump administration.
However, developments in electric-vehicle battery technology continued, with Chinese firms CATL and BYD announcing breakthroughs in ultra-fast charging capabilities.
In regulatory news, the European Union fined Apple and Meta a combined €700 million under its new Digital Markets Act, aiming to curb anti-competitive practices. Meanwhile, the UAE plans to integrate AI into the legislative process, a move seen as bold given current AI limitations.
Overall, The Economist highlights how a mix of economic uncertainty, political interventions, technological shifts, and stricter regulatory actions are shaping today’s global business environment.
