The world economy is experiencing a period of growth without stability, a new report suggests. The headline figure shows an upgraded 2025 global GDP forecast of 3.2%, but the accompanying analysis reveals an uncomfortable truth: the foundations are weak, and the outlook is “dim” due to multiple, unresolved risks.
The report argues that the current “unexpected resilience” is unstable because it’s based on temporary factors. A rush of consumer spending to get ahead of tariffs provided a short-term boost, but the long-term damage to investment confidence from protectionist policies is still spreading through the global system.
The UK’s economic situation perfectly captures this lack of stability. It is set to be one of the G7’s fastest-growing economies this year with 1.3% growth. However, it is also facing the G7’s highest and most persistent inflation problem, a clear sign of underlying imbalance.
Adding to the instability are two major threats. The first is the economic drag from restrictive immigration policies, which are expected to slow growth and fuel inflation in key economies like the US. The second is the potential for a sharp “correction” in “stretched” stock markets, which could trigger a sudden halt in crucial business investment.
The report is a clear warning against complacency. It suggests that while the growth numbers may look acceptable for now, the lack of stability poses a significant threat. Policymakers are being urged to address the underlying risks rather than being distracted by the short-term positive data.