Global growth driven by strong US economy expected in 2025

The world is expected to achieve positive growth in 2025 despite continued trade and geopolitical tensions and relatively higher interest rates than in previous years, the leaders of some economies and financial institutions said.

- Kang Wan Chern

However, much of that growth will be mostly driven by the US, International Monetary Fund (IMF) managing director Kristalina Georgieva told a World Economic Forum (WEF) panel in Davos, Switzerland, on Jan 24.

This is because the US has higher productivity levels, capital availability and opportunities for entrepreneurship than the rest of the world, as well as a strong culture of confidence, she said.

With confidence and trust levels down in the rest of the world, countries will need to rebuild a basis of optimism for growth, and avoid moving towards a fragmented, zero-sum world, where one country's gain comes at the expense of another, said Singapore President Tharman Shanmugaratnam, who was also on the panel.

Using the innovativeness of the Americans and the talent of the Europeans as examples of each economy's strengths, he added that Asian countries can also leverage their desire to stay open and interdependent to grow.

Ms Georgieva and Mr Tharman were joined by Saudi Minister of Economy and Planning Faisal Alibrahim, European Central Bank president Christine Lagarde and BlackRock chairman and chief executive Laurence D. Fink in the discussion on the global economic outlook in 2025.

The penultimate session of the five-day WEF was moderated by CNBC financial news anchor Sara Eisen.