Worldwide economic situation 2025: Do we have a global economic crisis or economic flaut?

Published on: March 19, 2025 / update from: March 19, 2025 - Author: Konrad Wolfenstein

Worldwide economic situation 2025: Do we have a global economic crisis or economic flaut? - Image: Xpert.digital

Economic doldrums instead of crisis: How Germany loses the connection

Regional differences: Why other countries are more economically successful

The current economic situation can be described globally as a persistent economic flaut than a profound crisis. However, there are clear regional differences, with Germany in particular fighting with structural problems, while other economies have better development.

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The global economic situation at an overview

The global economy is expected to grow roughly as much as in the previous year. Protections of growth are likely to be a solid development in the United States and above -average growth in many emerging countries. Overall, growth remains weak in the euro zone. For China, 2025 continued falling growth rates are to be expected.

Current forecasts assume moderate global growth:

The United Nations expect global growth in 2025 to remain 2.8 percent, which, however, is at the pace of pandemic.
The OECD has reduced its global growth forecast and now expects only 3.1 percent growth in 2025 worldwide, which corresponds to 0.2 percentage points less than in its forecast from December.
The Federal Association of German Industry (BDI) is somewhat more pessimistic and forecast that in 2025 the economic growth of the global economy will fall back to 2.7 percent.

These numbers indicate a doldrum, but not to a global crisis. The growth rates are positive, albeit under the long -term trend and expectations.

Regional differences in economic development

The clear regional differences in economic development are remarkable:

USA: The American economy is likely to grow by around 2.4 percent in 2025, which is a relative strength compared to other industrialized countries.
China: Despite falling growth rates, China remains an important engine in the global economy, with the dynamics reduced compared to previous years.
Eurozone: Here the growth remains weak overall, with significant differences between the member countries.
Germany: The German economy is in a particularly pronounced doldrum. The Institute for Macroeconomics and Economic Research (IMK) predicts growth of only 0.7 percent in 2025, while the IFO Institute is only 0.2 percent more pessimistic.

Germany - crisis or long -lasting doldrums?

The situation in Germany is particularly worrying. The German economy has been in stagnation for several years, which should also continue in 2025, albeit with slight improvements. It is only in the course of next year that a tentative recovery of the German economy can be expected.

The German economy is fighting several problems at the same time:

According to the IFO business forecast, the price-adjusted gross domestic product will stagnate this year and increase only 0.9 percent in 2025. It was not until 2026 that slow recovery could be used with 1.5 percent growth.
"The German economy is still shaped by significant growth differences between individual large economies and between the economic sectors," emphasizes Munich Re in its outlook.
Industry in particular is particularly affected: "High energy and labor costs are pressing their competitiveness. In addition, industries such as traditionally low-export vehicle construction are increasingly looking up in a challenging international competition."

While some economic researchers speak of a “doldrum”, others already refer to the situation as a “crisis”. The economist Clemens Fuest, President of the IFO Institute, differentiates: "No, it is not an economic crisis," he says, because one only speaks of it when you see "a phase with a significant negative development of gross domestic product". This does not currently apply in Germany that are stagnating. "This is not a gratifying development, but it's just a stagnation, not a crisis."

Global risk factors for economic development

The economic recovery is threatened by various factors that could trigger tightening the doldrums or even a crisis:

Geopolitical uncertainties: The Russia Ukraine War and the non-enclosed conflict in the Middle East are mentioned as important geopolitical risk scenarios that could escalate again.
Commercial tensions: The political course in the USA, especially with regard to trade policy, are of particular importance. "If the new US administration rely on significantly higher tariffs, global trade and growth will slow down-ultimately also in the USA."
Economic policy uncertainty: The economic situation is further shaped at the beginning of 2025 by “high internal and foreign policy uncertainties”.

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A differentiated view is necessary

The question of whether we are in a global economic crisis or an economic flaut cannot be answered in a general way. Viewed worldwide, it is more of a false with moderate growth of around 2.7 to 3.1 percent. However, the situation differs greatly according to regions:

The economic situation in the USA is relatively robust.
The euro zone fights with weak growth.
Germany is in a particularly stubborn stagnation, which some observers already refer to as a crisis.

UN General Secretary António Guterres brings the situation to the point by emphasizing that countries cannot ignore these dangers, since shocks in a networked economy in part of the world increase prices in another part. Therefore, every country has an interest in it and must be part of the solution based on the progress already achieved.

The current economic situation requires a differentiated view and illustrates the interweaving of the global economy. What appears as a doldrum in part of the world can already accept crisis -like trains in other regions.

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