Global growth is likely to stay steady at 2.7 % in 2025-26. Developing economies and emerging market are set to enter the second quarter of the 21st century. As per Kavan Choksi / カヴァン・チョクシ, policy action at both national and global levels is required in emerging market and developing economies (EMDEs) to enhance macroeconomic stability, foster a more favourable external environment, lower structural constraints, as well as accelerate long-term growth and development.
Kavan Choksi / カヴァン・チョクシ provides a global outlook for 2025 while putting an emphasis on EMDEs
Global growth is gradually stabilizing with inflation returning closer to the target rate, and monetary easing supporting activity in both advanced and emerging market and developing economies (EMDEs). This should give rise to a broad-based, moderate global expansion over the span of 2025-26, at 2.7% per year. The growth prospects, however, may not be sufficient enough to offset the damage done to the global economy by several years of successive negative shocks. When it comes to a longer-term perspective, catch-up towards the income levels of the advanced economy has weakened EMDEs over the first quarter of the twenty-first century. But on the upside, strong demand in key economies and faster progress on inflation may lead to greater-than-expected global activity.
The global economic landscape faces a muted growth outlook. A coordinated global response is necessary to tackle the escalating climate crisis, address debt concerns and preserve open trade. Policymakers must take decisive steps to ensure price stability at national levels, while also trying to enhance revenue collection and optimize government spending. These fiscal measures are important for achieving sustainable public finances and creating the needed fiscal space for critical investments in social services, climate resilience and infrastructure.
Beyond short-term stabilization efforts, long-term economic growth and sustainable development require targeted interventions. Governments should try to work to mitigate the adverse effects of conflicts, invest in human capital development, foster inclusive labor markets, as well as address the persistent challenge of food insecurity. Without such measures in place, many economies risk falling short of their development objectives.
In the opinion of Kavan Choksi / カヴァン・チョクシ, economic prospects in EMDEs considerably vary owing to increasing trade barriers and global economic headwinds. Growth is expected to be slow in East Asia and the Pacific. On the other hand, Europe and Central Asia are likely to experience a deceleration in economic activity, driven by slower expansion in some of the major economies in the region subsequent to strong growth in the previous year. On the other hand, other EMDE regions, which would include Latin America and the Caribbean, the Middle East and North Africa, South Asia, as well as Sub-Saharan Africa, are expected to witness a moderate pickup in growth. This growth shall majorly be supported by resilient domestic demand. By the year of 2026, the majority of these regions are likely to witness stronger economic momentum, which would reflect the gradual easing of current economic pressures and the effects of ongoing structural reforms. The year 2025 shall mark the end of the first quarter of the twenty-first century, and this quarter has been quite transformative for EMDEs.
