World Economy

In the United States, the high economic growth and increased wealth recorded over recent quarters provide prerequisites for continued economic expansion driven by rising consumption. However, in recent months the uncertainty surrounding the outlook for economic policy may restrain private demand going forward. In Russia, high economic activity persists, largely supported by strong domestic consumption, particularly in the services sector. At the same time, in China a slowdown in economic activity is observed due to weakening domestic demand, while in the Eurozone economic growth remains at a low level. Overall, risks of a slowdown in global economic activity persist.

Significant uncertainty remains around the fundamentals of the U.S. economy. Uncertainty related to economic policy—especially trade and fiscal policy—has increased, contributing in recent months to heightened volatility in financial markets and some price adjustments in assets. Although consumption in the U.S. has continued to grow at a rapid pace in recent quarters—supporting high economic growth (in the fourth quarter of 2024, economic growth amounted to 2.3%, of which around 2.8 percentage points was contributed by the increase in personal consumption expenditures)—the recent rise in policy uncertainty poses risks of delaying consumption and investment, and consequently slowing economic growth. While overall inflation is gradually approaching the target, several indicators characterizing underlying inflation, including inflation for sticky-price goods and wage growth, remain significantly above the target level. At the same time, the trade and fiscal policies pursued by the new U.S. administration pose major risks from the perspective of expanding inflationary pressures, potentially deepening the Federal Reserve’s dilemma between ensuring price stability and full employment. In addition to short-term inflationary effects, the potential formation of a more expansionary fiscal stance in the medium term also entails risks of placing the debt burden on a higher trajectory and raising the underlying neutral interest rate. This may affect both the future path of Federal Reserve policy and long-term interest rates and capital flows in emerging economies. These developments continue to create challenges for monetary authorities in achieving the inflation target and ensuring their commitment to price stability.

The European Central Bank, in March 2025, again reduced its policy rate by 25 basis points to 2.65%. After a temporary acceleration in 2024 due to external demand factors, economic growth has remained generally low at the beginning of the year, and the outlook and structure of growth—especially in the industrial sector—remain concerning. Overall inflation is decreasing due to the easing of goods inflation, while services inflation remains high, reflecting a deepening divergence among developments in different sectors of the economy. This presents a significant challenge for the speed of ECB policy adjustment and for ensuring achievement of the inflation target.

The risks of weak domestic demand in the Eurozone and China, as well as uncertainties surrounding economic policy directions and geopolitical developments, remain major factors shaping the outlook for lower global economic growth.

Russia maintains high levels of economic growth, supported by expansionary fiscal policy and a significant rise in private spending. In such an environment, intensifying competition for labor between the military industry and the private sector—amid tight labor market conditions—may heighten inflationary risks. In this context, despite substantial tightening of policy conditions by the Central Bank of Russia, no significant progress has yet been observed regarding inflation stabilization. On the other hand, stricter and more targeted Western sanctions, combined with significantly tighter monetary conditions, pose certain risks for Russia’s medium-term economic outlook. At the same time, the likelihood of a near-term resolution of the Russia-Ukraine conflict has increased, which predominantly carries upward risks for short- and medium-term economic growth.

In global commodity markets, food prices have stabilized in recent months, forming at higher levels compared to the previous year. Nevertheless, substantial uncertainty persists regarding medium-term commodity market developments. Escalating geopolitical tensions in the Middle East continue to pose risks of potential increases in oil prices and volatility, as well as possible disruptions to global value chains. On the other hand, further weakening of global demand may generate downward pressure on prices.