Global growth is expected to decline and downside risks to intensify as major policy shifts unfold Executive Summary: Following an unprecedented series of shocks in the preceding years, global growth was stable yet underwhelming through 2024 and was projected to remain so in the January 2025 World Economic Outlook (WEO) Update. However, the landscape has changed as governments around the world reorder policy priorities. Since the release of the January 2025 WEO Update, a series of new tariff measures by the...

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Amid trade tensions and high policy uncertainty, the path forward will be determined by how challenges are confronted and opportunities embraced Blog post by Pierre-Olivier Gourinchas | The global economic system under which most countries have operated for the last 80 years is being reset, ushering the world into a new era. Existing rules are challenged while new ones are yet to emerge. Since late January, a flurry of tariff announcements by the United States, which started with Canada, China,...

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New targeted amendments to existing EU funding programmes will support faster, more flexible and coordinated investments in Europe's defence technological and industrial base (EDTIB). Under a new Regulation to stimulate defence-related investments within the EU budget proposed today by the Commission, the EU will strengthen its defence Readiness 2030 and to implement the ReArm Europe plan. The proposed changes will enhance the ability of the EU and Member States to develop, scale up and innovate in key defence capabilities, while streamlining access to EU...

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Risks have risen as financial conditions tightened, with key vulnerabilities ahead Capital markets are essential for driving economic activity, providing mechanisms for raising funds and allocating resources efficiently. The stability of these markets and the financial institutions that intermediate them are therefore macro-critical, especially when market volatility and economic uncertainty are high, as they are now. In the latest Global Financial Stability Report, we assess that global financial stability risks have grown significantly, driven by tighter financial conditions and heightened trade and...

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By Fédéric Holm-Hadulla and Sebastiaan Pool Central banks usually seek to align very short-term interest rates in the money market with their own policy rate. But money market rates fluctuate also for reasons other than policy. This blog shows that monetary policy is more effective if such fluctuations are small. Discussions about monetary policy usually centre on whether interest rates should go up, down or stay the same. The complexities of how monetary policy is carried out in practice often go...

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Member states’ representatives (Coreper) approved today the Council’s position (‘negotiating mandate’) on one of the Commission’s proposals to simplify EU rules and thus boost EU competitiveness. This proposal aims to increase the EU's investment capacity to mobilise around €50 billion in additional public and private investments in support of certain EU policies, notably related to the Competitiveness Compass, the Clean Industrial Deal, defence industrial policy and military mobility. The proposed changes further seek to make it easier for Member States to...

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From Monday to Saturday, Commissioner Valdis Dombrovskis, in charge of Economy and Productivity, Implementation and Simplification, Commissioner Jozef Síkela, in charge of International Partnerships, and Commissioner Maria Luís Albuquerque, in charge of Financial Services and the Savings and Investments Union, are attending the 2025 Spring Meetings of the World Bank Group (WBG) and the International Monetary Fund (IMF) in Washington, D.C.   Commissioner Dombrovskis will represent the European Commission at the sessions of the International Monetary and Financial Committee (IMFC) at the International Monetary Fund...

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EIB Group President Nadia Calviño will lead an EIB Group delegation to meet   global partners and fellow Multilateral Development Banks in Washington DC Boosting strategic investment to reinforce peace, prosperity and partnerships is at the heart of the EIB Group agenda Announcements to include  new investments for energy security, climate action and accelerated support for Ukraine, as well strengthening cooperation with fellow Multilateral Development Banks An EIB Group delegation led by President Nadia Calviño will participate in the 2025 Spring Meetings of...

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International aid from official donors fell in 2024 by 7.1% in real terms compared to 2023, the first drop after five years of consecutive growth, according to preliminary data collected by the OECD. The fall in official development assistance (ODA) was due to a reduction in contributions to international organisations, as well as a decrease in aid for Ukraine, lower levels of humanitarian aid and reduced spending on hosting refugees in donor countries. ODA by member countries of the OECD’s Development...

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Blog post by: Era Dabla-Norris, Davide Furceri, Mauricio Soto | Public approval is crucial for carrying out difficult reforms that can help countries lower debt and increase growth Many countries struggle with low economic growth and high debt and will need bold fiscal actions to restore their finances. Two significant areas for potential savings are energy subsidies and pension systems. However, reforms in both areas can be unpopular with the public. Public support is crucial for the success of these reforms, and governments...

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