ACCA’s outlook examines prospects, major risks for global economy

LAHORE:The second edition of ACCA's annual economic outlook examines the prospects and major risks for the global economy and key countries.

According to a press release, the report, 2025 Global Economic Outlook: A highly uncertain world, includes an exclusive interview with economist Charles Goodhart, highlights key events in 2025, examines three trends to watch closely, and interviews chief financial officers (CFOs) from across the globe.

Distinguished economist Charles Goodhart reflects on the enormous uncertainty in the global economy currently. He suggests that the US economy may perform strongly in 2025, but that Europe and the UK could struggle. He is generally optimistic about India’s prospects.

As regards inflation, Goodhart argues it could fall in the short-run but will likely rebound in 2026 and 2027, where upwards pressure may become quite considerable in the US. On artificial intelligence (AI), he asserts that while it may not be a silver bullet for poor productivity growth, it could help reduce inequality within countries.

Jonathan Ashworth, chief economist at ACCA and author of the report, said: ‘The global economy should continue to grow at a reasonable, but not particularly exciting pace in 2025. But it is a world marked by significant uncertainty.

The risks are predominantly on the downside, amid potential changes in US trade policy, a challenging geopolitical backdrop, political uncertainty and rising government bond yields.’ The report highlights three key trends to watch in the global economy in 2025:

Developments with AI: The emergence of AI agents promises new productivity breakthroughs, but hybrid solutions integrating other technologies will be crucial for sustained value. Rising geo-economic fragmentation: Will US trade policies begin to push globalisation into reverse.

Further retreating from green policies: Amid cost-of-living pressures and political shifts in developed economies, climate-related commitments are under strain, with potential long-term consequences for sustainability.