THE year 2025 marked the end of the initial phase of global economic adjustments.
The global economy performed much better than feared, cruising at a soft speed estimated at 3.1% in 2025 (3.3% in 2024) as the impact of US tariffs and supply chain pressures proved more contained than expected amid persistent geopolitical tensions.
The global economy’s resilience was supported by strong labour markets, export front-loading ahead of tariffs, less restrictive monetary policy, better financial conditions, fiscal expansion, and strong performance in the United States as well as some emerging markets.
Major central banks, which generally began cutting interest rates, albeit at varying speed from mid-2024 as inflation eased somewhat, have continued in 2025 for some like the US Federal Reserve (Fed) converges towards rate cut caution on inflation risk amid softening labour market conditions going into 2026.
There were growth disparities among the advanced economies and emerging economies.
The US economy entered the final stretch of 2025 amid a mixture of relief following the conclusion of a record 43-day federal government shutdown and a one-year trade tariffs truce with China.
The labour market has softened in recent months, characterised by significantly s
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