

Global growth set for decline, as ballooning government debts take hold
Jun 3, 2025
The global economy faces a slowdown, with growth projected at just 2.9%. Rising government debts and ongoing U.S.-China trade tensions are major concerns. The podcast digs into the importance of strategic government policies to boost growth amid increasing fiscal pressures. It also highlights the significant impacts of global trade dynamics, with a focus on companies like Temu and Shein, alongside Tesla's maneuvers in India. Trade agreements have historically reduced global poverty, but current uncertainties pose new challenges.
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Global Growth Slowing Due To Trade Tensions
- The OECD forecasts global economic growth slowing to about 2.9% this year and next due to increased trade tensions and uncertainty.
- Protectionist measures and tariffs are major factors causing downgrades in economic outlooks for many countries, including the US, Canada, and Mexico.
Policy Advice To Boost Growth
- Governments should avoid further trade fragmentation to help revive global growth.
- Boosting investments is critical since global investment has fallen roughly 22% since the financial crisis.
Public Debt Challenges Growth Efforts
- Public debt levels worldwide are the highest in about 80 years, creating a difficult balance between investment and fiscal discipline.
- Rising expenditure pressures make fiscal prudence essential despite the need for growth-supporting investments.