World economy to face trade wars, sluggish growth, ongoing geopolitical risks in 2025
Date
12/26/2024 8:11:50 AM
(MENAFN) In 2025, the world Economy will face significant challenges, including trade wars, sluggish growth, and ongoing geopolitical risks. This follows a year of monetary easing and decreasing inflation. Many countries that had previously implemented measures to ease monetary policy quickly raised interest rates in the latter part of the year to combat rising inflation.
The US Federal Reserve responded to inflation by cutting its policy rate by 25 basis points in December, marking a total reduction of 100 basis points for the year. This brought its policy rate to a range of 4.25 percent to 4.5 percent. Similarly, the European Central Bank (ECB) concluded the year with four rate cuts, including a 25-basis-point reduction in December, which lowered its deposit rate to 3 percent. Its refinancing and marginal lending facility rates were adjusted to 3.15 percent and 3.40 percent, respectively.
The Bank of England (BoE) also joined the global trend of rate cuts, reducing rates by 25 basis points in both August and December, bringing its rate to 4.75 percent. This marked the first rate cut for the BoE since March 2020, resulting in a total reduction of 50 basis points for the year.
Despite these efforts to ease monetary policy, weak growth across many countries, potential trade tensions, and persistent geopolitical risks continue to weigh on the global economy, creating uncertainty for the year ahead.
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