The Association of Chartered Certified Accountants (ACCA) has released the second edition of its annual economic outlook report, analysing the prospects for the global economy in 2025. Titled 2025 Global Economic Outlook: A Highly Uncertain World, the report delves into key economic risks, emerging trends, and business implications, offering insights from chief financial officers (CFOs) and leading economists.
A key highlight of the report is the insights of economist Charles Goodhart, who provides a critical assessment of global economic challenges. While he foresees robust growth in the United States, he expresses concerns over economic struggles in Europe and the UK. Goodhart remains cautiously optimistic about India’s prospects but warns of potential inflationary pressures in the coming years. On artificial intelligence (AI), he suggests that while it may not resolve global productivity issues, it could help reduce inequality in some economies.
Jonathan Ashworth, Chief Economist at ACCA and author of the report, predicts a modest global growth rate of 3.2% in 2025. However, he cautions that geopolitical tensions, trade policy shifts in the US, and rising government bond yields could pose significant risks. While AI-driven productivity gains, policy easing in China, and infrastructure investments in emerging markets present potential opportunities, challenges such as stricter immigration policies, tariff escalations, and climate policy rollbacks could hinder sustainable growth.
The report identifies three major trends shaping the global economic landscape in 2025:
– AI and productivity: AI advancements may drive breakthroughs, though hybrid technologies will be key to sustained value.
– Geoeconomic fragmentation: Increasing trade and investment restrictions signal a continued slowdown in globalisation.
– Retreat from green policies: Economic pressures and political shifts threaten climate commitments, raising concerns about long-term sustainability.
CFO insights from diverse industries highlight cautious optimism, with concerns over talent shortages, inflation, and geopolitical risks. AI remains a focal point, with businesses acknowledging both its potential and disruptive impact.
Sachin Bansal, CFO of Wipro Consumer Care and Lighting, notes mixed economic signals in India, with rural consumer spending improving but urban consumption moderating due to high costs. However, he remains confident that inflation will stabilise and growth will regain momentum in 2025.
As global uncertainties persist, the report underscores the need for businesses and policymakers to adopt agile strategies, embrace innovation, and build resilience in an evolving economic landscape.
