Global Economy in May 2025: Uncertainty, Divergence, and Structural Transition

Rising Global Uncertainty​

According to a recent survey conducted by the World Economic Forum, 82% of chief economists believe that global uncertainty is at an “exceptionally high” level. The areas with the highest uncertainty include:

• Trade policies (97%)
• Monetary policies (49%)
• Cost-related policies (35%)
  (aa.com.tr)

The International Monetary Fund (IMF) forecasts global real GDP growth at 2.8% for 2025, down from 3.3% in 2024, signaling a slowdown in global economic activity.
(ekonomim.com)

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U.S. Economy: Contraction and Policy Ambiguity​

In the first quarter of 2025, the U.S. economy shrank by 0.2%, despite increases in consumer spending and private investment. Meanwhile, the Personal Consumption Expenditures (PCE) price index rose by 3.6%, reflecting persistent inflation.
(aa.com.tr)


The Federal Reserve held interest rates steady in May, but potential policy changes are expected at the June 2025 meeting, particularly amid uncertainties around new tariff measures under the Trump administration.
(bigpara.hurriyet.com.tr)

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Europe & China: Diverging Economic Trends​

• The Eurozone’s growth forecast has been revised from 0.9% (2024) to 0.8% (2025), signaling stagnation.
• Germany remains relatively optimistic due to expected fiscal expansion.
  (aa.com.tr)
• For China, 2025 GDP growth is forecast to decelerate to around 4.7%, though expert opinions remain mixed.
  (wrsimperium.com)

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Turkish Economy: Disinflation and Weak Confidence​

Turkey’s inflation, which peaked at 75% in May 2024, has dropped to 38% by March 2025. The decline is largely attributed to easing food prices.
(worldbank.org)


The Economic Confidence Index, published by the Turkish Statistical Institute (TÜİK), rose slightly by 0.05% to 96.7 in May. However, it remains below the neutral threshold of 100, indicating lingering pessimism in economic sentiment.
(dunya.com)

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Conclusion and Forward Outlook​

As of mid-2025, the global economy is marked by heightened uncertainty, sluggish growth, and regional divergence. Key observations include:

• U.S. economic contraction and ambiguous monetary policy
• Stagnation in Europe and moderating growth in China
• Turkey’s disinflation trend, coupled with subdued confidence

Key Watch Points for Policymakers & Investors:​

• Trade Policies: Global trade frictions continue to shape investment climates.
• Central Bank Strategies: Interest rate decisions will be pivotal for inflation and growth.
• Emerging Markets: Their economic resilience will influence global momentum.