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In 2024, the global economy remained resilient in an environment marked by restrictive financial conditions and the major international economies managed to grow by more than expected. Nevertheless, 2025 is still set to be a challenging year: the threat of greater economic fragmentation has now been added to the risk map, with an increase in trade barriers and uncertainty.

After performing better than expected in the first half of 2023, global economic activity has experienced a slowdown in Q3 as a result of differing dynamics among the major economies. Below, we take a look at the outlook for the international economic environment.

De-risking, decoupling, fracturing, reshoring, nearshoring, friendshoring... understanding the new era of globalisation

At the close of this report, the conflict in the Middle East remains unresolved and continues to exert pressure on the price of energy and its derivatives. The duration of the conflict will be crucial in assessing its economic impact. The region produces nearly 30% of the world’s crude oil and 20% of its gas, the latter being a key input in the production of fertilisers and helium, which are essential for semiconductor manufacturing. Additionally, it contains two of the world’s major maritime routes: the straits of Hormuz and Bab-el-Mandeb (in the Red Sea). Moreover, there are factors that could hasten a resolution to the conflict, such as Trump’s declining popularity (which could affect him in the mid-term elections) and the high economic cost of the war. Given the uncertainty of the environment, our economic forecasts are anchored in quoted market energy prices.

We outline the five assumptions that must be met in order for the factors that are holding back economic growth to dissipate and for the outlook with which the year has begun to be confirmed.

The recovery of investment should gain traction over the coming years and, in the case of the Spanish economy, the execution of the European NGEU funds is expected to exert ever greater traction on private investment.

maintaining the tone of recent quarters, we continue to see more lights than shadows in the complex transition that the business cycle is currently immersed.

Cautiously optimistic outlook for the international economy, but with a demanding risk map. The US stands out among advanced economies, while the euro area has not yet left behind its sluggish economic activity. Among emerging markets, India’s growth tops the BRICS, with China giving way to the new leader.

The economic recovery in the euro area continued during Q2, but it began to lose momentum in June. The Purchasing Managers’ Index (PMI) for the euro area remained at levels compatible with positive growth in June, but disappointed by falling with respect to the previous month, weighed down by an industrial sector that is slipping deeper into recession.

We are entering the final stretch of the year following a summer marked by the Olympic Games in Paris and a brief episode of financial turbulence which was triggered, in part, by fears that the US economy could fall into recession. Those fears have been shown to be somewhat exaggerated and the global economy has seen a continuation of the trend of recent quarters, although the outlook for the final part of the year has weakened. The time has therefore come to adjust the economic and financial outlook scenarios with all the new information that has come to light in recent months.

The tailwinds generated by the latest inflation data and strong labour markets coexist with a natural loss of cyclical momentum and, in particular, with an environment marked by high geopolitical risks. This combination of competing forces will determine the pace of growth over the coming quarters.

We are therefore heading towards a context with higher tariffs and in which, most likely, there will be some reconfiguration of global value chains in an attempt to compensate, insofar as possible, for the loss of attractiveness of the US market. Consequently, we are moving towards a world with greater fragmentation, lower economic growth and the risk of higher inflation.

2025 will be a year in search of a new normal, threatened by the division between economic blocs. The best outcome would be to regain multilateral cooperation in order to tackle the new challenges and spread the risks together. 

Stable economic outlook but with increasing risks: geopolitical instability, uncertainty and a lack of confidence.

While income inequality has declined sharply around the world over the past 30 years thanks to the rapid economic growth of emerging countries such as China and India, it has increased in developed countries such as the United States, Germany and even France.

The latest available economic indicators suggest that the trends observed for much of 2024 remain in place as the year draws to a close: buoyancy and resilience in the US, weakness in the euro area due to the delicate situation in Germany and France, and a lack of momentum in the Chinese economy in the absence of decisive economic stimuli.

The international economy showed remarkable resilience in 2024 and the available data suggest that world GDP may have grown slightly above 3%. The tailwinds that supported economic activity will likely continue to blow in 2025, albeit with less strength and in the face of significant challenges.