Here’s what happened in January.
Global Overview
- World economy growing steadily at 3.1%, below historical average but stable
- Inflation continuing to moderate globally, enabling monetary policy easing
- Major uncertainty from Trump administration’s potential tariffs and policy shifts
Regional Patterns
- United States: Slowing to 2.4% but outperforming other advanced economies
- Europe: Modest 1.2% growth with significant country variation
- Asia: Leading global growth with India (6.4%) strong while China moderates (4%)
- Latin America: Improving slightly to 2.5%, facing climate and trade policy risks
- Middle East: Growth uneven amid regional tensions; energy exporters benefiting from stable prices
- Africa: Outperforming at 4.2%, though political stability remains a concern
Major Risks
- Geopolitical Tensions: Ukraine and Middle East conflicts disrupting energy markets and trade routes
- Trade Policies: Potential US tariffs threatening global supply chains
- Climate Change: Extreme weather increasingly impacting economic output
- Debt Levels: High public debt constraining fiscal options globally
Conclusion
Despite challenges, most economies show resilience with moderating inflation and improving labor markets. However, regional divergence remains pronounced, with emerging Asia outperforming while Europe and Latin America face stronger headwinds.