Global Economic Outlook for the Second Half of 2025: Fragile Growth in Turbulence

Any developments in the Strait of Hormuz have a major impact on the global economy . *Photo: Newsweek*

The World Trade Organization (WTO) has just announced that the global merchandise trade barometer (GTB) - a composite index of global merchandise trade, increased to 103.5 (from 102.8 in March 2025) as importers bought large quantities of goods in anticipation of the tariff wave. However, the new export orders index fell to 97.9, signaling a slowdown in trade growth by the end of 2025.

The WTO figures are in line with the views of trade organizations, amid concerns about a prolonged slowdown. According to the latest forecast of the Organization for Economic Cooperation and Development (OECD), global GDP in 2025 may only increase by about 2.9%, lower than the historical average and also the lowest level since the Covid-19 pandemic. The International Monetary Fund (IMF) is more optimistic with a growth forecast of 3.3%, but still emphasizes that the risks are tilted to the negative.

The main concern comes from complex and difficult-to-control geopolitical trends. IMF Deputy Managing Director Gita Gopinath assessed: "The most dangerous thing now is that geopolitical shocks occur together with tight monetary policy. If oil prices exceed $110/barrel for many months, central banks will not be able to lower interest rates as expected and the global economy will be at risk of a technical recession."

This assessment is close to reality, as the conflict between Iran and Israel still threatens to escalate into a regional war. The Strait of Hormuz, through which nearly 20% of global crude oil is transported, has become a potential choke point for the energy market. Brent crude has increased by nearly $10 a barrel since the beginning of June.

Many analysts believe that if the conflict continues, oil prices could exceed $110 a barrel. The knock-on effects cannot be underestimated, especially for major energy-importing economies such as Europe and Japan.

Meanwhile, the Russia-Ukraine war continues to drag on with no end in sight. The impact of this conflict is no longer limited to the energy sector but has spread to the supply chain of agricultural products, metals, etc.

The Eurozone, which relies heavily on exports and political stability, is being held back with growth expected to be just 1.0-1.3% in 2025. Although inflation in the Old Continent has cooled, the European Central Bank (ECB) has maintained higher-than-average interest rates to control risks, weakening investment and consumption.

The US and Chinese economies are no longer the growth anchors they were in the past. The US is facing a turning point as trade policies become tougher.

The White House's reimposition of tariffs on imports from China and Mexico not only increases domestic consumer costs but also creates negative spillover effects on global supply chains.

In China, with systemic problems such as the real estate crisis, high youth unemployment and US-China trade tensions, growth forecast in 2025 is only about 4.3-4.7%.

Beijing has begun rolling out fiscal stimulus packages to boost public investment and domestic consumption, but the impact is unclear. Amid this challenging picture, India and Southeast Asian economies have emerged as bright spots, despite pressure from high commodity prices and capital costs.

The outlook for the global economy in the second half of 2025 is mixed, with dark spots still dominating. However, opportunities remain if major economies maintain macroeconomic stability and have flexible policy coordination.

Adjusting the investment portfolio, shifting to dynamic emerging markets and essential industries such as energy, agriculture, smart manufacturing technology, etc. will be a feasible strategy.

OECD chief economist Clare Lombardelli said that in the context of global growth facing pressure from many sides, economies must prioritize stability over hot growth.

With the current scenario, the global economy in the second half of 2025 requires both governments and businesses to respond cautiously, adapt and innovate in all policy decisions. This is not only a period of weathering the storm, but also a test of the resilience and sustainable recovery of the world economic system.

Source: https://hanoimoi.vn/trien-vong-kinh-te-toan-cau-6-thang-cuoi-nam-2025-tang-truong-mong-manh-trong-song-gio-707328.html