(Extract from the 2025 Annual Report of AADFI)
The global economic environment in 2025 was shaped by a complex mix of resilience and uncertainty, as economies navigated persistent inflationary pressures, shifting trade dynamics, and policy uncertainty. Economic activity was supported by stockpiling of goods, strong investor confidence, and increased investment in artificial intelligence (AI)[1]. Average global GDP growth was 3.2% (see Fig.1), with advanced economies growing by 1.5% and emerging markets and developing economies by 4%³. Inflation eased globally in 2025, supported by tighter monetary policies and improving supply conditions. Global inflation was about 4.2%[2], marking a steady decline from 4.5% in 2024 and 6.7% in 2023[3] (see Fig.1). Labor market conditions in 2025 remained relatively stable, with the global unemployment rate at 5.2% (see Fig.1). Higher tariffs and shifting trade policies disrupted supply chains, increased production costs, and contributed to financial market volatility. As a result, the pace of global trade growth slowed, with merchandise trade volumes expanding by about 2.9%, down from 3.5% in 2024[4]. Trade activity in early 2025 was temporarily boosted by firms accelerating shipments ahead of anticipated tariff increases, a phenomenon known as front-loading, which inflated short-term trade volumes[5]. Total trade in goods and services reached over $35 trillion in 2025, up about $2.2 trillion from 2024, driven largely by services and high-technology trade[6][7].
[1] https://blogs.worldbank.org/en/developmenttalk/the-global-economy-in-five-charts2
[2] https://desapublications.un.org/publications/world-economic-situation-and-prospects-mid-2025
[3] https://www.imf.org/en/Publications/WEO/Issues/2024/10/22/world-economic-outlook-october-2024
[4] https://www.wto.org/english/news_e/news25_e/stat_07oct25_e.htm?utm_source=chatgpt.com “AI goods and frontloading lift world trade in 2025 but …”
[5]https://www.linkedin.com/pulse/2025-2026-tech-trade-outlook-key-points-from-imf-wto-october-reports-lutuf?utm_source=chatgpt.com “2025 and 2026 Tech Trade Outlook: Key Points from the …”
[6] https://unctad.org/news/global-trade-hit-record-35-trillion-despite-slowing-momentum?utm_source=chatgpt.com “Global trade to hit record $35 trillion despite slowing …”.
[7] https://unctad.org/publication/global-trade-update-december-2025-global-trade-poised-record-breaking-2025-flows