The global economy is not expected to make a rebound over the short term as there are clear signs it will slow down, which is bad news for poor countries relying on exports to fuel economic growth.
This, as the Organization for Economic Cooperation and Development (OECD) recorded a gross domestic product (GDP) growth of only 0.1 percent in the first quarter of 2025, slowing from 0.5 percent of the previous quarter.
Also, the overall GDP growth rate for the Group of 7 (G7) nations was also at 0.1 percent in the first quarter of this year, decreasing from the 0.4 percent of the previous quarter.
Compounding the situation is Fitch has forecast an average potential growth of 3.1 percent for the Group of 10 (G10) developing countries.
The IMF expecting a global economic growth of 3.3 percent in 2025
OECD ECONOMIES FALTER
The OECD reported that the Japanese economy contracted in the first quarter by 0.2 percent from the 0.6-percent growth of the previous quarter. This was primarily caused by a 2.4-percent rise in imports in the first three months of the current year.
Meanwhile, the US economy shrank, from 0.6 percent to minus 0.1 percent as the imports of goods increased sharply by 10.8 percent in the first three months of the current year.
“The rise in US imports of goods, likely influenced by anticipated changes to trade tariffs, was the main drag on growth,” it said.
Also, the Canadian economy slowed down by 0.4 percent in the first quarter from 0.6 percent, while the GDP of the United Kingdom rose marginally to 0.7 percent from 0.1 percent, mainly attributed to an increase in investments.
Among other OECD economies, Ireland recorded the highest growth rate with 3.2 percent in the first quarter of the current year.
FITCH DOWNGRADES FOR G10
For its part, international credit rating agency Fitch has downgraded its forecast for medium-term of five-year growth potential for the G10 developing countries, or to 3.9 percent from 4 percent.
Fitch made the revision as it sees China’s potential growth rate going down to 4.3 percent this year from 4.6 percent.
Also, growth forecasts for Mexico, Indonesia and South Korea were downgraded.
On the positive side, Fitch revised upwards the GDP growths for Russia, Brazil, Poland and India, while its forecasts for South Africa and Türkiye remained unchanged.
Specifically, the five-year growth forecasts were revised down to 4.7 percent from 4.9 percent for Indonesia, to 1.8 percent from 2 percent for Mexico, and to 1.9 percent from 2.1 percent South Korea.
The projected growth rate for India was raised to 6.4 percent from 6.2 percent, 3.2 percent from 3 percent for Poland, 2.0 percent from 1.7 percent for Brazil, and 1.2 percent from 0.8 percent for Russia.
Meanwhile, the medium-term forecast for South Africa was maintained at 1 percent and Türkiye at 4.1 percent.
