2025 Global Economy: Inflation, Geopolitics, Trade Blocs Reshape World Order

• Global growth slowed to 2.3% in 2025, driven by persistent inflation, energy volatility, and geopolitical shifts, marking a year of structural recalibration.
• Major economies faced severe cost-of-living crises: UK saw "Awful April" price hikes, US grappled with housing unaffordability, and Europe battled budget deficits.
• Geopolitical tensions intensified with China's real estate crisis, Russia's energy disruptions, and the rise of new trade blocs like the CRINK alliance.
• Trade shifted from "globalization" to "friend-shoring," with a "Security-First" paradigm, accelerating EU-India FTA talks and "middle power" diplomacy.
• The Green Transition spurred "Resource Diplomacy" and carbon border taxes, further fragmenting the global economy into competing strategic networks.

Why It Matters: 2025 redefined the global economy with slow growth, high inflation, and a shift to strategic trade blocs.