Overview of Conditions

Updated 30 April 2025:  As of end of April the global economy is losing momentum, with growth softening and recovery uneven across major economies. According to the IMF’s latest World Economic Outlook, global growth forecasts have been revised downward amid tariffs, persistent inflation, rising policy uncertainty, and escalating geopolitical tensions.

On 2 April, referred to as "Liberation Day" by President Trump, the US announced sweeping tariffs, triggering a sharp global market sell-off and financial turmoil. A week later the White House announced a 90-day moratorium on implementing most of the specific tariffs. This pause excluded China, where the tariff confrontation reached unprecedented levels impacting global trade and supply chains. Markets partially rebounded after the temporary pause was announced bringing certain degree of stability amidst global trade negotiations.

Meanwhile, inflation has broadly moderated, though core pressures in services persist. Central banks are moving cautiously: the Fed holds steady amid tariff-driven uncertainty, the ECB continues to ease, and the Bank of England remains on pause amidst stagnation. China maintains targeted support as mild deflation persists. As policy fragmentation grows, monetary authorities face a delicate balancing act between disinflation and rising strategic risks.

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 IMF’s latest World Economic Outlook presents a markedly more   pessimistic assessment of the global economy, revising global GDP growth   downward to 2.8% in 2025. This new estimate reflects the sharp rise in   effective tariff rates, heightened policy uncertainty, weakening consumer   sentiment, and volatile financial markets. Inflation, while gradually   declining, is expected to ease more slowly than previously projected,   particularly in advanced economies grappling with persistent price   pressures and labour market tightness. In the US, growth is now projected   at just 1.8%, a sharp reduction from the earlier 2.8% projection. The   Eurozone is projected to grow by 0.8%, while the UK is expected to expand   by 1.1%. Meanwhile, China’s growth is projected at 4.0%, as the country   contends with internal structural imbalances and mounting external   pressures, including ongoing trade frictions and weakened global demand.

​

FDI flows

The bottom line:

According to the latest OECD data from Q3 2024, FDI flows continue to reflect shifting global investment patterns. The EU rebounded during the third quarter of last year, but long-term investment prospects remain uncertain due to regulatory complexity and slow economic momentum.

The UK posted steady, though moderate inflows, reflecting investor caution amid policy shifts. China’s FDI slowdown persists, as inward flows did not recover in Q3 2024. As a result, investors are increasingly diversifying into emerging markets like India, Mexico, and Brazil, which continue to attract capital due to stable regulatory environments and supply chain advantages.


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 are taking diverging approaches as they navigate the current situation. The ECB lowered its key interest rates again—setting the deposit facility at 2.25%, the main refinancing operations rate at 2.40%, and the marginal lending facility at 2.65%—seeking to support weak growth while maintaining a cautious stance amid deteriorating confidence and industrial output. The Fed, by contrast, held steady at 4.25-4.5%, signalling a patient and cautious approach, monitoring the economic impact of tariffs and inflation trends. The Bank of England maintains rates at 4.5%, with markets expecting cuts to begin in May. China kept its rate at 3.1%, favouring stability as policymakers weigh the risks of capital outflows and currency volatility.

As of April 2025, inflation data reveal persistent cross-country divergences, complicating monetary policy decisions. In the US, annual inflation eased to 2.4%, driven by lower energy and housing costs, though recent tariff announcements have reignited inflation risks, adding uncertainty to the Fed’s disinflation path. In the euro area, inflation fell further to 2.2%, giving the ECB additional room to ease policy despite looming trade tensions. In the UK, inflation dropped to 2.6%, but the impact of US tariffs clouds recovery prospects. Meanwhile, China remains in mild deflation at -0.1%, highlighting weak domestic demand and constrained policy options.


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 April 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 experienced sharp volatility in April, with major indices declining early in the month amid renewed trade tensions and heightened policy uncertainty. The S&P 500, Euro Stoxx 50, and FTSE 100 came under pressure before partially rebounding after the US announced a temporary moratorium on most reciprocal tariffs. The recovery was supported by stabilising inflation data in Europe and reaffirmed cautious stances from central banks. UK markets showed relative resilience, while Chinese equities underperformed despite continued stimulus efforts.




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.





The bottom line:

In April 2025, 10-year bond yields have continued to ease across major economies, reflecting a cautious shift in market sentiment. In the US, yields have stabilised after an earlier decline, as markets recalibrate expectations around the inflation outlook and the Federal Reserve’s policy stance. In the euro area, yields have edged lower, with growing anticipation of further ECB easing as inflation continues to retreat. UK yields have also declined over the quarter, reflecting persistent stagnation and shifting investor expectations around the Bank of England’s policy path. Meanwhile, Chinese yields remain broadly stable, consistent with a policy approach focused on managing long-term structural adjustments rather than near-term stimulus.

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:

Labour markets across major economies remain resilient in early 2025, but signs of caution are emerging. In the US, unemployment has edged up slightly to 4.2%—a modest shift that reflects growing uncertainty as firms hold back on hiring amidst rising borrowing costs and tariff pressures. The Eurozone remains around the 6.2% mark, though confidence is waning in key sectors like services and retail. In China, the urban unemployment rate has nudged up to 5.3%, signalling stability on the surface, while automation and supply chain shifts quietly reshape jobs. The UK’s 4.4% rate masks a stagnant market, with hiring delays tied to geopolitical and financial headwinds. Headline figures remain steady, but the labour market mood is increasingly cautious.

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 April 2025, global trade momentum is faltering, as highlighted by the WTO’s latest Global Trade Outlook. After growing by 2.9% in 2024, merchandise trade is now expected to contract by 0.2% amid rising tariffs, fragile demand, and renewed geopolitical tensions. While services exports surged by 9% last year, resilience remained uneven across sectors: strong gains in electronics contrasted with persistent weakness in energy and automotive trade. A critical development was the US announcement of a universal 10% tariff on all imports, plus “reciprocal” tariffs against countries with trade surpluses. Although some US tariffs have been temporarily suspended as negotiations progress, the WTO warns that unresolved disputes could subtract up to 1.5 percentage points from global trade growth. The sharper volatility seen in trade and financial markets points to broader systemic risks, as protectionism and policy fragmentation reshape investment flows and market sentiment.


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:

The latest CEO surveys reveal a cautious yet strategic approach to navigating 2025’s economic complexities. CEOs express measured optimism, balancing opportunities in technology adoption and sustainability with persistent macroeconomic and geopolitical challenges. Generative AI emerges as a central focus, with leaders prioritising ethical integration and workforce reskilling to drive efficiency gains and competitiveness. However, expectations for AI to significantly boost revenue remain tempered, highlighting varied levels of readiness and strategic alignment across industries.

Sustainability has solidified its role as a core element of business strategy, with ESG efforts aligning closely with digital transformation goals. Yet, progress is uneven, and stakeholder pressure for measurable impact continues to grow. Meanwhile, geopolitical risks—including inflation, trade protectionism, and political instability—dominate the external agenda, pushing CEOs to focus on resilience and adaptability. Overall, 2025 is set to be a year defined by strategic pivots, where success will depend on leveraging technology, advancing sustainability, and navigating external volatility with agility and foresight.


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

35%

of CEOs are optimistic about the global economy, marking an increase from 27% in late 2023.


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

nearly 60%

of CEOs believe the US Federal Reserve will cut interest rates by the end of the third quarter, though lingering uncertainty over geopolitical risks persists.


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

Sustainability prioritisation slows as geopolitical instability diverts resources, though 55% of CEOs continue advancing key ESG goals.

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

68%

cite generative AI as a tool to drive cost efficiencies and innovation, with a focus on insights and agility.



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

62%

put geopolitical instability as the top external business disruptor, with CEOs focusing on building operational resilience against external shocks.

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 Fall 2024 CEO Survey Insights.