Estonian Economy and Monetary Policy 3/2025
Growth in the global economy has beaten expectations this year despite trade tensions and a lack of certainty. The USA has postponed its tariffs or brought them in at a lower level than feared and the advance purchases made in anticipation of a deterioration in terms of trade helped the global economy to revive in the first half of the year, though that effect was only temporary. The outlook for the global economy in the next few years is modest though. The International Monetary Fund forecasts that growth overall in 2025 will slow and that it will not strengthen particularly in subsequent years. The global economy was growing by almost 4% a year on average before the pandemic, but it will now have to accept growth of around 3%. The reasons for this are quite clear because growth in productivity has slowed, international tensions have increased, and trade is fracturing. Growth in the working-age population has also slowed, and the impact of this can be felt throughout the global economy.
