Overview of Conditions

Updated 01 July 2025: As of June 2025, global economic growth continues to slow amid persistent inflationary pressures and uneven recovery trajectories across regions. The OECD’s latest Economic Outlook for 2025 and 2026 broadly aligns with recent IMF forecasts, reflecting ongoing global trade volatility, constrained fiscal and monetary policy space, and subdued consumer demand. In Europe, where geopolitical uncertainty continues to weigh on performance and inflation remains persistent, the European Central Bank adjusted its policy stance this month by further lowering key interest rates.

Meanwhile, trade tensions appear to be easing following the resumption of US–China discussions on a potential industrial trade framework. However, both Canada and the EU have prepared countermeasures which—if enacted—could further disrupt already strained supply chains. Market sentiment remains cautious and volatile as observers await clarity on the trajectory of reciprocal tariff negotiations between the US and key partners, including the EU, Canada, and China.

See below for more detail on current global business conditions.

Global Economy 

In this section, we examine GDP growth forecasts for the EU, UK, US and China using data from the OECD, IMF, World Bank and FDI flows using data from OECD and UNCTAD.

GDP Growth 


Source: Original Ibec Global chart based on the data from: International Monetary Fund. (December 2024). OECD Economic Outlook, Volume 2024 Issue 2: Preliminary version, World Bank. 2024. Global Economic Prospects, January 2025.

The bottom line:

The OECD’s latest Economic Outlook projects global growth slowing from 3.3% in 2024 to 2.9% in 2025 and 2026, with the sharpest declines in the US, Canada, Mexico, and China. Inflationary pressures persist due to higher trade costs, though weaker commodity prices may provide some relief. Growth in the US is projected to slow to 1.6% in 2025, while the euro area will sit at 1%. China’s growth projections are now estimated at 4.7% and the UK would experience a moderate growth of 1.3% in 2025. The OECD notes that risks persist, including trade fragmentation, tighter financial conditions, and persistent inflation, which could further weaken growth and strain low-income countries. Additionally, the report remarks that central banks should remain vigilant, balancing inflation control with growth support, while fostering global cooperation to preserve the benefits of open, rules-based trade.

FDI flows

The bottom line:

UNCTAD’s latest World Investment Report reveals deep regional divides in global FDI flows. Developed economies saw a 22% decline, with Europe hardest hit led by dramatic drops in Germany, Spain, Italy and France. In contrast, North America surged (+23%) on the back of US semiconductor megaprojects. Africa posted a record 75% increase, driven by infrastructure in Egypt. 

Asia remained the top recipient region despite a dip, with ASEAN up 10% and India attracting greenfield momentum. Latin America fell 12%, though signs of renewal emerged in Brazil, Mexico and Argentina. The US led both inflows and outflows globally. Greenfield announcements rose in number but dipped in value, still marking one of the highest totals on record at $1.3 trillion.


Source: Original Ibec Global chart based on OECD data

Source: Original Ibec Global chart based on OECD data

Source: Original Ibec Global chart based on UNCTAD data.


Source: Original Ibec Global chart based on UNCTAD data.

Financial Conditions

In this section, we examine interest rates, inflation, and stock market performance in the Eurozone, UK, US and China using data from the European Central Bank, Federal Reserve, Bank of England and the Peoples Bank of China; and stock market performance using data from The Euro Stoxx 50, S & P 500, FTSE 100, and CSI 300.

Interest Rates & Inflation

The bottom line:

Central banks across regions, with the exception of the European Central Bank, have kept interest rates steady this month. The ECB reduced rates—the deposit facility lowered to 2%, the main refinancing rate lowered to 2.15%, and the marginal lending facility to 2.4%— in an attempt to stimulate economic growth in the Eurozone, which has been impacted by factors like recent trade tensions and global policy volatility.

The Bank of England maintained its interest rate at 4.25% this month, taking a more cautious approach amid persistent geo-political uncertainty. The Federal Reserve also remained on hold at 4.25–4.5%, as it evaluates the impact of recent inflation and evolving US trade relations. Similarly, the People’s Bank of China's benchmark rate remains at 3.0%, prioritising the need for financial stability in spite of currency stability concerns.


​

As of June 2025, inflation trends remain uneven across major economies, posing challenges for central banks in setting appropriate monetary policies. In the US, annual inflation nudged higher to 2.4% and core inflation fell slightly to 2.7%, showing modest price changes in light of recent tariff adjustments. In the euro area, inflation stood at 2% despite improving business indicators and with services inflation staying elevated. In the UK, inflation edged slightly downwards to 3.4% after reaching its highest level in over a year —impacted by falling air fares— as the Bank of England works to reinvigorate weak economic growth. Similarly, China registered a year-on-year decline of 0.1%, signalling low consumer confidence in light of continued price increases to services and continued trade disputes with the US. Although the ECB is the only major region to adjust interest rates this month, all regions face similar geopolitical challenges impacting economic performance, particularly weak consumer demand, trade uncertainty and sluggish growth.


Source: Ibec Global original chart based on the latest monetary policy reports by the European Central Bank (MRO rate), Bank of England, the Federal Reserve, and the People's Bank of China.

Interest Rates (as of June 2025) 

Source: Ibec Global original chart based on the Consumer Price Index Summary of the US Bureau of Labor Statistics; Eurostat; UK’s Office for National Statistics; China National Bureau of Statistics, Consumer Price Index.

Financial Markets

The bottom line:

Equity markets maintained steady momentum this month with continued improvement to investor sentiment amid economic uncertainty across regions. The S&P 500 registered gradual gains, reflecting optimism around economic resilience and tech leadership, though volatility resurfaced as trade negotiations with Canada evolved, underscoring how quickly geopolitical developments can challenge market confidence, even in an otherwise positive environment. The Euro Stoxx 50 increased slightly, supported by hopes of fiscal stimulus and corporate earnings, though solid data remains elusive. Equities in the UK remained stable amid robust consumer demand in the face of continued inflationary pressures. In China, equity performance showed cautious improvement aided by a slight upturn in domestic demand and further government policy intervention. As the US engages in dialogue with global trade partners, markets have shown early signs of recovery but continue to demonstrate susceptibility to policy shifts and evolving geopolitical developments.




Bond Markets

Source: Ibec Global original chart based on Germany 10Y Bond; UK 10Y Bond; US 10Y Bond and China 10Y Bond.;

Note: The German 10-year Bund is considered the Eurozone’s benchmark bond, valued for its strong role in ECB policy decisions as a key indicator of market conditions.

Source: Ibec Global original chart based on the stock prices of Euro Stoxx 50, FTSE 100, S&P 500 and CSI 300.











Bond markets stayed relatively constant in June 2025, despite varied inflationary data and government policy expectations across regions. US yields declined slightly as markets absorbed evolving investor expectations and global trade developments. In the eurozone, yields continued to chart a modest upward trajectory given similar investor confidence and stable monetary policy measures. UK yields came under increased strain amid further expectation of interest rates cuts. Meanwhile, Chinese bond yields remain stable in light of reduced domestic industry momentum and continued investor caution. 

Labour Market

In this section, we examine unemployment rates in the Eurozone, UK, US and China using data from the US Bureau of Labour Statistics, Eurostat, UK's Office for National Statistics and the National Bureau of Statistics in China.

Unemployment Rates


Source: Ibec Global original chart based on the data from the US Bureau of Labor Statistics; Eurostat; UK’s Office for National Statistics; National Bureau of Statistics of China.

The bottom line:

According to the latest data, labour markets across major economies remain broadly stable, but early signs of cooling have become visible. In the US, the unemployment rate remains steady at 4.2%, given the prolonged pause in hiring momentum amid tighter financial conditions and ongoing trade tensions.  The Eurozone’s gradual decline to 6.2% still points to resilience, as the underlying fragility lingers in consumer-facing sectors. The UK unemployment rate rose marginally to 4.6%, highlighting the economic strain exacerbated by increased business costs, lower recruitment levels and continuing economic uncertainty. China's urban unemployment rate fell slightly to 5% amid further government macro-economic policy intervention and a slight upturn in consumer confidence and production. More broadly, uncertainty persists as a common challenge across regions as businesses continue to navigate economic policy shifts, technological advancements and heightened trade tensions.

Productivity

The bottom line:

Productivity trends continue to show notable divergence. The US remains the global leader, with output per hour worked rising to 81.8 USD, driven by advances in automation and sustained investment in workforce skills. The Eurozone improved to 71.32 USD, reflecting modest gains but still constrained by structural inefficiencies and uneven progress among member states. In the UK, productivity grew slightly to 69.49 USD, underscoring persistent stagnation tied to limited investment and economic uncertainty. 
Meanwhile, China’s increase to 19.77 USD highlights incremental progress fuelled by industrial upgrades, though structural challenges like an aging workforce and capital inefficiencies continue to weigh on long-term potential. These patterns underscore the uneven pace of global productivity growth, shaped by technological advancement and regional disparities.​

Source: Ibec Global original chart based on the estimates from the International Labour Organisation (ILO).

Trade

In this section, we examine the value of exports using data from the World Trade Organisation.


Exports

The bottom line:

As of June, trade tensions show early signs of easing, with the US and China entering discussions on a potential framework to reduce some of the more restrictive measures on key industrial inputs, including rare-earth materials. While these moves suggest a shift from previous cycles of tariff escalation and export controls, uncertainty remains elevated. Both the EU and Canada are preparing countermeasures in response to recent US trade actions, which, if enacted, could intensify pressure on already stretched global supply chains. Trade in services continues to demonstrate greater resilience than goods, though some spillover effects are becoming more visible. Market sentiment remains cautious and volatile as attention turns to the upcoming July 9 deadline, when further clarity is expected on the direction of reciprocal tariff negotiations between the US and its key partners.



Source: Ibec Global original chart based on the data from the April 2024 WTO Global Trade Outlook and Statistics.

CEO Sentiment & Outlook

In this section, we analyse CEO sentiment and outlook by aggregating multiple globally-renowned sources including from KPMG, EY and PwC and Deloitte & Fortune.

The bottom line:

CEO outlooks for 2025 reflect strategic caution amid rising complexity. While there is still measured optimism—particularly around AI and digital transformation—persistent macroeconomic volatility, trade tensions, and geopolitical instability are reshaping priorities. Generative and agentic AI adoption is accelerating, but leaders remain realistic about short-term revenue impact, focusing instead on operational efficiency, responsible use, and workforce reskilling.

Sustainability is increasingly tied to business performance, with ESG efforts aligning closely to digital goals. However, progress is inconsistent, and stakeholder demand for measurable outcomes is intensifying. Meanwhile, tariffs and supply chain disruption are pushing CEOs to reallocate capital, build resilience, and adopt scenario-based planning. In short, 2025 will be defined by targeted execution—success will favour those who act decisively, invest selectively, and adapt faster than the uncertainty around them.


Overall Sentiment​

KPMG

74%

of global CEOs express confidence in the global economy over the next 3 years, reflecting improved sentiment from 2023 (73%).

EY

67%

of CEOs expect revenue growth, but 33% foresee challenges ahead due to macroeconomic volatility.

PwC

52%

of CEOs expect revenue growth, with focus shifting to resilience rather than expansion.

Deloitte & Fortune

60%

of CEOs are optimistic about their own company’s performance, down from 84% in Fall 2024. Meanwhile, 58% express pessimism about the global economy over the next 12 months, a sharp rise from 18%.


Key highlight​

KPMG

79%

of CEOs believe tightening monetary policies and persistent cost-of-living pressures will challenge organisational growth, yet 82% aim to sustain long-term investments in talent and technology.

EY

92%

of CEOs place digital transformation as the cornerstone of their 2024 agenda, focusing on AI and workforce upskilling.

PwC

49%

of CEOs worry their organisations may not remain viable in 10 years unless immediate structural changes are made.

Deloitte & Fortune

71%

of CEOs plan to adapt their supply chains in response to shifting trade policies. Cost management strategies include cutting costs (42%) and limiting price hikes (only 28%).


Sustainability​

KPMG

72%

of global CEOs have embedded
ESG into their strategies, but 65%
express concern over stakeholder scrutiny and pressure to deliver measurable outcomes.

EY

CEOs emphasise alignment of ESG initiatives with digital transformation strategies to meet stakeholder demands.

PwC

68%

of CEOs report decarbonisation progress, with energy efficiency leading the way.

Deloitte & Fortune

Environmental issues fell from 14% to just 2%, indicating a significant loss of priority amid economic and geopolitical pressures.

Technology
​

KPMG

83%

of CEOs view Generative AI as critical to long-term competitiveness, but concerns about ethical use persist.

EY

78%

of CEOs are investing heavily in AI to boost efficiencies, though 64% worry about limited impact on revenue.

PwC

70%

of CEOs see AI as a double-edged sword—improving efficiency but creating workforce reskilling challenges.

Deloitte & Fortune

89%

of CEOs are exploring or implementing agentic AI, and nearly two-thirds report GenAI is delivering value. One in ten CEOs expect at least one business function to be fully implemented with agentic AI by year-end.

 


Top Concern ​

KPMG

81%

of CEOs cite geopolitical instability as their primary external disruptor, while inflation and energy transition remain key risks.

EY

77%

worry about political instability and its impact on economic conditions, especially in key markets.

PwC

28%

of CEOs see inflation as their top concern, while macroeconomic volatility (26%), and geopolitical conflict (22%) also remain as significant concerns for CEOs.

Deloitte & Fortune

72%

put geopolitical instability as the top external business disruptor, followed by inflation (44%) and other sources of financial/market instability (40%). Concerns over supply chain disruption also rose significantly to 25%, up from 11% in Summer 2024.

Source: Original Ibec Global based on the results of KPMG 2024 CEO Outlook; EY January 2025 CEO Outlook; PwC 28th Annual Global CEO Survey; Fortune/Deloitte CEO Survey: Spring 2025.