Climate-related commitments are ‘under strain’ due to cost-of-living pressures and political shifts in developed economies, which could have potential long-term consequences for sustainability, the Association of Chartered Certified Accountants (ACCA) has said in its second annual economic outlook.
The 2025 Global Economic Outlook: A Highly Uncertain World report highlights the ‘retreat from green policies’ as a key trend to watch in the global economy this year, along with the impact of AI-related technologies, and rising geo-economic fragmentation as a result of changing US trade policies.
‘Significant uncertainty’
“The global economy should continue to grow at a reasonable, but not particularly exciting pace in 2025,” commented Jonathan Ashworth, chief economist at ACCA and author of the report. “But it is a world marked by significant uncertainty. The risks are predominantly on the downside, amid potential changes in US trade policy, a challenging geopolitical backdrop, political uncertainty and rising government bond yields.”
The report suggests that the US economy may perform strongly this year, along with India, however Europe and the UK may find the going tougher.
Inflation, meanwhile, is likely to fall in the short-term, but will rebound in 2026 and 2027, with upward pressure on prices likely to be ‘quite considerable’ in the US.
Risks to global growth
The report also features insights from seven CFOs across different industries and regions, which cite climate change as a potential risk to global growth, along with trade policy shifts, geopolitical tensions, inflation and cybersecurity. AI, they note, should be seen as both an opportunity and a source of disruption, with CFOs emphasising the need for ‘agility, innovation, and resilience in navigating an uncertain economic landscape’.
“In a year marked by significant uncertainty, understanding the interplay of economic, political, and technological factors is critical for businesses and policymakers,” Ashworth added. Read more here.
