World economy to decelerate in 2025: Institute

ISTANBUL

World economic growth is expected to decelerate to 2.7% in 2025 from 2.9% in 2024, the International Institute of Finance (IIF) forecasted Wednesday.

The IIF's expectation for mature markets' GDP rate for 2025 was at 1.3% on average, down from 1.5% in 2024.

The expectation for the US was at 1.9%, 0.6% for the euro area, 3.8% for emerging markets (EMs), 1.7% for Russia, 2.5% for Türkiye and 4.2% for China.

Capital flows to EMs are forecast to decline to $716 billion in 2025 from $944 billion in 2024, driven by weaker flows to China, said the institute.

In 2024, China saw its first net foreign direct investment outflows in decades, with an equally disappointing forecast for 2025. Capital flows to non-China EMs will moderate to $781 billion in 2025 from $824 billion in 2024, the IIF said.

Geopolitical tensions and US energy policies will add uncertainty to commodity prices, it noted.