Reconfiguring the global trade landscape: recovery and fragmentation at the same time

2025-03-04

Global Economic Outlook 2025: Divergent Growth Amid Geopolitical Shifts
Xi'an Digital Multi-Channel Marketing Centre | Updated: Tuesday, 4 March 2025



1. Moderate Recovery with Structural Imbalances

The global economy is projected to grow by 3.2% in 2025, though momentum remains uneven.

  • Asia Leads Growth:

    • India (7%), Vietnam (6.1%), and the five ASEAN economies (4.5%) drive expansion.

    • Contrasts starkly with developed markets: Eurozone (1.1%) and Germany (0.2%).

  • Post-Pandemic "Scar Effects" persist, including high debt burdens and supply chain realignments, constraining long-term potential.



2. Trade and Investment Divergence

Regionalized Trade Dynamics:

  • Asian exports surge (+7.4%), while EU exports decline (-1.4%).
    FDI Rebound with Concentration:

  • Cross-border investment has rebounded, but it is primarily concentrated in strategic sectors such as semiconductors and renewables, crucial for technological advancement and sustainability. However, the use of tax havens distorts accurate growth measurement, complicating efforts to gauge true economic performance.



3. Geopolitical Risks Reshape Supply Chains

  • U.S. "Friendly Outsourcing" Policy: Accelerates industrial relocations to Mexico and Southeast Asia.

  • Conflict-Driven Volatility:

    • Russia-Ukraine war and Middle East tensions disrupt energy and food supply chains.

  • Rising Protectionism: Further fragments global trade frameworks.



(2025/3/4 written from Shawwal)


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