Executive Summary
The global economy in 2025 demonstrated resilience despite renewed trade tensions, geopolitical conflicts, and persistent inflationary pressures. The return of President Trump to office triggered successive tariff measures that elevated policy uncertainty and market volatility. Nonetheless, negotiated rollbacks, front-loaded trade activity, and resilient demand—particularly in the United States—helped moderate the impact on global growth. Global disinflation progressed unevenly, limiting aggressive monetary easing but allowing a cautious pivot toward accommodation across major economies.
In the United States, output contracted in early 2025 due to pre-tariff import stockpiling before rebounding strongly as consumer spending remained resilient. Inflation stayed above target, prompting the Federal Reserve to initiate modest rate cuts in the second half of the year. Europe and the United Kingdom recorded modest growth as easing price pressures allowed central banks to lower policy rates. China’s economy benefited from policy support, though weaker external demand constrained momentum later in the year.
Oil markets were characterized by oversupply, with rising global production outpacing demand and driving prices lower in the second half. This environment constrained revenues for oil exporters but eased imported inflation pressures.
Nigeria’s economy gathered momentum following GDP rebasing, supported by easing reform-related constraints, improved confidence, and stronger activity across agriculture, services, construction, and hydrocarbons. Inflation declined sharply after CPI rebasing, driven by improved food supply conditions and greater exchange-rate stability. In response, the Central Bank of Nigeria initiated its first policy easing in five years, signalling a gradual shift toward accommodation. Foreign exchange conditions improved materially, with reduced volatility, stronger reserves, and narrowing misalignment supporting naira stability. Financial markets responded positively, as fixed income yields compressed and equities delivered strong gains on improved macro confidence.
