Overview of Conditions
Updated 28 February 2025:Global growth projections remain steady, with the IMF maintaining its forecast at 3.3% for both 2025 and 2026. However, OECD data published in February 2025 indicates a slowdown in Q4 2024, with GDP growth easing to 0.3%, down from 0.5% in the previous quarter. The US continues to outperform, supported by strong investment and labour markets, while the Eurozone stagnates at 1%, constrained by weak demand and high energy costs. Meanwhile, China’s 4.6% growth, as projected by the IMF, reflects mounting structural and geopolitical pressures.
Inflation trends also diverge. US inflation reached 3.0%, driven by services and housing costs. The Eurozone’s inflation stands at 2.4% but weak price momentum suggests subdued underlying demand. Meanwhile, China remains in a deflationary trap, with inflation stagnating at 0.2%, reinforcing concerns over weak domestic consumption. Meanwhile, trade tensions continue to mount, with the US imposing new tariffs on China, adding to global supply chain fragmentation. The WTO projects global trade volume to grow by 3.0% in 2025, but rising protectionism and geopolitical risks create an uncertain outlook.
These trends highlight an evolving global economic landscape, where the US maintains momentum, while Europe and China struggle with stagnation and systemic challenges. Policymakers face increasingly complex trade-offs as they adapt to shifting capital flows, inflation dynamics, and geopolitical instability.
See below for more detail on current global business conditions.
Global Economy
In this section, we examine GDP growth forecasts for the EU, UK, US and China using data from the OECD, IMF, World Bank and FDI flows using data from OECD and UNCTAD.
GDP Growth
Source: Original Ibec Global chart based on the data from: International Monetary Fund. (December 2024). OECD Economic Outlook, Volume 2024 Issue 2: Preliminary version, World Bank. 2024. Global Economic Prospects, January 2025..
The bottom line:
As of February 2025, global growth projections remain stable, with the IMF maintaining its forecast at 3.3% for both 2025 and 2026. This situation reflects a balance between a slight upward revision for the US and downward adjustments for other major economies. The IMF projects the US economy to grow by 2.7% in 2025, supported by strong labor markets and investment activity. Meanwhile, the Eurozone’s forecast has been lowered to 1%, as weak consumer confidence and high energy costs continue to weigh on growth. China’s expected slowdown to 4.6% reflects fragile domestic demand and ongoing external pressures.
While projections remain steady, the latest OECD data showed a slight deceleration in Q4 2024 GDP growth, with member countries expanding by 0.3%, down from 0.5% in the previous quarter. This slowdown was driven by mixed performances within the G7—while the US maintained growth, Germany and France recorded contractions. These trends highlight regional divergences, with the US showing resilience, Europe facing stagnation, and China managing structural adjustments.
FDI flows
The bottom line:
According to the latest OECD data from Q3 2024, FDI flows continue to reflect shifting global investment patterns. The EU rebounded during the third quarter of last year, but long-term investment prospects remain uncertain due to regulatory complexity and slow economic momentum.
The UK posted steady, though moderate inflows, reflecting investor caution amid policy shifts. China’s FDI slowdown persists, as inward flows did not recover in Q3 2024. As a result, investors are increasingly diversifying into emerging markets like India, Mexico, and Brazil, which continue to attract capital due to stable regulatory environments and supply chain advantages.
Source: Original Ibec Global chart based on OECD data
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Source: Original Ibec Global chart based on OECD data
Source: Original Ibec Global chart based on UNCTAD data.
Source: Original Ibec Global chart based on UNCTAD data.
Trade
In this section, we examine the value of exports using data from the World Trade Organisation.
Exports
The bottom line:
The World Trade Organization maintains a projection of 3% growth in 2025 for global merchandise trade. However, escalating geopolitical tensions and policy-driven risks pose significant challenges. President Donald Trump's recent imposition of a 10% tariff on all Chinese imports has heightened trade uncertainties, potentially disrupting supply chains and increasing production costs.
In response, China has expressed concerns over these tariffs, with Vice Premier He Lifeng discussing the issue in a call with U.S. Treasury Secretary Scott Bessent. Simultaneously, the European Union is engaged in negotiations with the U.S. to reduce and potentially eliminate tariffs on car imports, aiming to mitigate further economic harm. These developments underscore an increasingly polarized trade landscape, shaped by geopolitical rivalries and structural realignments.
Source: Ibec Global original chart based on the data from the April 2024 WTO Global Trade Outlook and Statistics.
Financial Conditions
In this section, we examine interest rates, inflation, and stock market performance in the Eurozone, UK, US and China using data from the European Central Bank, Federal Reserve, Bank of England and the Peoples Bank of China; and stock market performance using data from The Euro Stoxx 50, S & P 500, FTSE 100, and CSI 300.
Interest Rates & Inflation
The bottom line:
Monetary policies reflect diverging approaches shaped by shifting geopolitical dynamics. In the US, the Federal Reserve held its key rate to
4.25 - 4.5%, reflecting a more cautious stance. Chair Jerome Powell has signalled a limited path for further cuts as inflation remains sticky and political pressures mount. The Eurozone lowered rates to 2.75%, while struggling with weak industrial output and external pressures, particularly potential tariffs on European goods under the new US administration. The UK, lowered its rate to 4.5%, but continues to face concerns over stagnant growth. Meanwhile, China’s steady rate of 3.1% reflects concerns over slowing domestic demand and rising geopolitical tension with the US, which could further disrupt trade flows.
The February 2025 data reveal persistent inflation asymmetries, complicating central bank strategies. In the US, January’s CPI increased by 0.5% bringing annual inflation to 3.0%. This change signals renewed inflationary persistence, particularly in services and housing, which challenges expectations of a smooth disinflation path and constrains the Fed’s policy flexibility. Euro area annual inflation stands at 2.4%. However, underlying demand remains muted, keeping price pressures moderate. In the UK, inflation reached 3.9%, driven by cost increases in key sectors such as services. Meanwhile, China’s inflation stayed at 0.2%, indicating persistently weak domestic demand and reinforcing concerns about deflationary risks. Within this scenario monetary policymakers face divergent challenges in an uncertain economic landscape.
Source: Ibec Global original chart based on the Consumer Price Index Summary of the US Bureau of Labor Statistics; Eurostat; UK’s Office for National Statistics; China National Bureau of Statistics, Consumer Price Index.
Interest Rates (as of February 2025)
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Source: Ibec Global original chart based on the Consumer Price Index Summary of the US Bureau of Labor Statistics; Eurostat; UK’s Office for National Statistics; China National Bureau of Statistics, Consumer Price Index.
Financial Markets
The bottom line:
Currently US and UK markets outpace global peers due to economic resilience and favourable sectoral dynamics. The S&P 500’s rise to 6,118.71 reflects strong corporate earnings, particularly in technology and services, coupled with stabilizing monetary policy that reassures investors. Similarly, the FTSE 100’s record 8,565.2 is driven by energy and commodity sectors, benefiting from high global demand and geopolitical disruptions that have elevated prices, especially in oil and gas.
The Euro Stoxx 50’s increase to 5,217.5 reflects a slight recovery but limited by weak growth and structural challenges in the Eurozone, including sluggish industrial output and uncertainties around energy policy. Meanwhile, the CSI 300’s decline to 3,803.74 points to waning investor confidence in China, as weak domestic consumption, demographic pressures, and strained US-China relations suppress market sentiment. These shifts highlight how geopolitics and structural factors drive market divergence, with advanced economies attracting capital, while China struggles to regain momentum.
Source: Ibec Global original chart based on the stock prices of Euro Stoxx 50, FTSE 100, S&P 500 and CSI 300.
Labour Market
In this section, we examine unemployment rates in the Eurozone, UK, US and China using data from the US Bureau of Labour Statistics, Eurostat, UK's Office for National Statistics and the National Bureau of Statistics in China.
Unemployment Rates
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Source: Ibec Global original chart based on the data from the US Bureau of Labor Statistics; Eurostat; UK’s Office for National Statistics; National Bureau of Statistics of China.
The bottom line:
US unemployment remained stable at 4% in early 2025 while the Eurozone held at 6.3%, with most member states seeing no change. China’s urban unemployment stayed at 5.1%, reflecting stable labour conditions, but automation and shifting supply chains are quietly reshaping workforce dynamics.
Meanwhile, the UK’s 4.4% rate signals ongoing stagnation, as firms delay hiring decisions in response to rising capital costs and geopolitical uncertainty. These trends point to cautious stability as labour markets adjust to shifting economic conditions.
Productivity
The bottom line:
As of January 2025, productivity trends continue to show notable divergence. The US remains the global leader, with output per hour worked rising to 81.8 USD, driven by advances in automation and sustained investment in workforce skills. The Eurozone improved to 71.32 USD, reflecting modest gains but still constrained by structural inefficiencies and uneven progress among member states.
In the UK, productivity grew slightly to 69.49 USD, underscoring persistent stagnation tied to limited investment and economic uncertainty. Meanwhile, China’s increase to 19.77 USD highlights incremental progress fuelled by industrial upgrades, though structural challenges like an aging workforce and capital inefficiencies continue to weigh on long-term potential. These patterns underscore the uneven pace of global productivity growth, shaped by technological advancement and regional disparities.
Source: Ibec Global original chart based on the estimates from the International Labour Organization (ILO).
CEO Sentiment & Outlook
In this section, we analyse CEO sentiment and outlook by aggregating multiple globally-renowned sources including from KPMG, EY and PwC and Deloitte & Fortune.
The bottom line:
The latest CEO surveys reveal a cautious yet strategic approach to navigating 2025’s economic complexities. CEOs express measured optimism, balancing opportunities in technology adoption and sustainability with persistent macroeconomic and geopolitical challenges. Generative AI emerges as a central focus, with leaders prioritizing ethical integration and workforce reskilling to drive efficiency gains and competitiveness. However, expectations for AI to significantly boost revenue remain tempered, highlighting varied levels of readiness and strategic alignment across industries.
Sustainability has solidified its role as a core element of business strategy, with ESG efforts aligning closely with digital transformation goals. Yet, progress is uneven, and stakeholder pressure for measurable impact continues to grow. Meanwhile, geopolitical risks—including inflation, trade protectionism, and political instability—dominate the external agenda, pushing CEOs to focus on resilience and adaptability. Overall, 2025 is set to be a year defined by strategic pivots, where success will depend on leveraging technology, advancing sustainability, and navigating external volatility with agility and foresight.
Overall Sentiment
KPMG
74%
of global CEOs express confidence in the global economy over the next 3 years, reflecting improved sentiment from 2023 (73%).
EY
67%
of CEOs expect revenue growth, but 33% foresee challenges ahead due to macroeconomic volatility.
PwC
52%
of CEOs expect revenue growth, with focus shifting to resilience rather than expansion.
Deloitte & Fortune
35%
of CEOs are optimistic about the global economy, marking an increase from 27% in late 2023.
Key highlight
KPMG
79%
of CEOs believe tightening monetary policies and persistent cost-of-living pressures will challenge organizational growth, yet 82% aim to sustain long-term investments in talent and technology.
EY
92%
of CEOs place digital transformation as the cornerstone of their 2024 agenda, focusing on AI and workforce upskilling.
PwC
49%
of CEOs worry their organizations may not remain viable in 10 years unless immediate structural changes are made.
Deloitte & Fortune
nearly 60%
of CEOs believe the US Federal Reserve will cut interest rates by the end of the third quarter, though lingering uncertainty over geopolitical risks persists.
Sustainability
KPMG
72%
of global CEOs have embedded
ESG into their strategies, but 65%
express concern over stakeholder scrutiny and pressure to deliver measurable outcomes.
EY
CEOs emphasize alignment of ESG initiatives with digital transformation strategies to meet stakeholder demands.
PwC
68%
of CEOs report decarbonization progress, with energy efficiency leading the way.
Deloitte & Fortune
Sustainability prioritization slows as geopolitical instability diverts resources, though 55% of CEOs continue advancing key ESG goals.
KPMG
83%
of CEOs view Generative AI as critical to long-term competitiveness, but concerns about ethical use persist.
EY
78%
of CEOs are investing heavily in AI to boost efficiencies, though 64% worry about limited impact on revenue.
PwC
70%
of CEOs see AI as a double-edged sword—improving efficiency but creating workforce reskilling challenges.
Deloitte & Fortune
68%
cite generative AI as a tool to drive cost efficiencies and innovation, with a focus on insights and agility.
Top Concern
KPMG
81%
of CEOs cite geopolitical instability as their primary external disruptor, while inflation and energy transition remain key risks.
EY
77%
worry about political instability and its impact on economic conditions, especially in key markets.
PwC
28%
of CEOs see inflation as their top concern, while macroeconomic volatility (26%), and geopolitical conflict (22%) also remain as significant concerns for CEOs.
Deloitte & Fortune
62%
put geopolitical instability as the top external business disruptor, with CEOs focusing on building operational resilience against external shocks.
Source: Original Ibec Global based on the results of KPMG 2024 CEO Outlook; EY January 2025 CEO Outlook; PwC 28th Annual Global CEO Survey; Fortune/Deloitte Fall 2024 CEO Survey Insights.