2024 started with the confidence that inflation was majorly beaten and major economies would be able to avoid recession. Those expectations were correct. As per Kavan Choksi, 2024 proved remarkably resilient for the world economy, even amidst challenging global dynamics. It was a year of strong growth across multiple sectors. According to the Global Economic Prospects Report, global growth is estimated to have stabilized at 2.7 % in 2024 and is likely to hold steady at that pace over 2025–26 Innovation and international trade especially is likely to foster varied growth across the world in 2025.
Kavan Choksi talks about international trade and innovation being growth drivers in 2025
There is a certain degree of uncertainty at the start of 2025 owing to a likely shift in policy subsequent to several elections around the globe. New policies may lead to brand new trajectories for inflation, currency values and borrowing costs, along with capital flows, cost of production and trade flows. Major changes in global trade dynamics, rising investment in research and development (R&D), and continued population migration are some factors that may shape the economic outlook for 2025. They would also provide opportunities for businesses seeking to maintain a competitive edge. Comprehensive industry analysis is important for effectively navigating such complex trends and uncovering new paths for growth and expansion.
International trade shall play a significant role in driving up the GDP in 2025. With evolving trade agreements and increased global interconnectivity, the changing dynamics of import and export activities have caused shifts among global economic powerhouses. Based on the data from the United Nations Conference on Trade and Development, the total value of world trade will reach a record high of $33.3 trillion by the end of 2025.
The CPTPP or Comprehensive and Progressive Agreement for Trans-Pacific Partnership may accept new members in 2025. This is a free trade agreement between 12 nations that encompasses over 15.0% of the world’s GDP.
The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a free trade agreement between 12 nations that encompasses over 15.0% of the world’s GDP, may accept new members in the coming year. The UK officially joined the program in December 2024, a move that has already started to boost global trade in 2025. According to the UK’s Department for Business and Trade, the anticipated impact of tariffs is projected to strengthen the country’s economy.
Even though China is excluded from the CPTPP, the country does occupy an important role in the Regional Comprehensive Economic Partnership (RCEP). This trade agreement is between the fifteen largest nations of the world, which account for almost a third of global GDP. The RCEP shall particularly be helpful for China based companies seeking to continue their exports amid President-elect Trump’s new tariffs.
As Kavan Choksi mentions, innovation is also likely to present a significant tailwind for global economic advancement in 2025. Companies across the world identify the critical role played by innovation in making them competitive, and push them to make strategic investments in sustainable technologies, biotechnology, AI and more. Technology giants across the world are allocating substantial budgets to R&D in order to bring new products to market and incite renewed demand. New developments are additionally expected to bolster the world’s sustainability capabilities in 2025.