Page 7 - Policy Economic Report - July 2025

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

Economy in Focus

1. A snapshot of the global economy

Global economic growth
• According to World Bank, global growth is expected to weaken to 2.3 percent in 2025, with

deceleration in most economies relative to last year.

• This is due to a substantial rise in trade barriers and the pervasive effects of an uncertain global policy
environment.

• This would mark the slowest rate of global growth since 2008, aside from outright global recessions.

• Thereafter, growth is forecasted to firm to about 2.5 percent over 2026-27, as trade flows continue
adjusting to higher tariffs such that global trade edges up, while policy uncertainty moderates from
record-high levels.

Figure 1: Global Growth (%)

Source- World Bank

• In case of Advanced economies, U.S. growth is expected to decelerate sharply in 2025, to 1.4 percent.
Investment spending is projected to be particularly hard-hit following the earlier frontloading of
imported investment goods. Policy uncertainty has remained high, with many firms highlighting
concerns about the impact of trade policy changes on prices.

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