Looking back at 2024, the global economy struggled along its slow recovery path, exhibiting a complex landscape characterized by insufficient momentum, unbalanced growth, and increasing fragmentation. On the one hand, escalating geopolitical conflicts and the spread of unilateralism and protectionism cast a shadow over the prospects for global growth. On the other hand, international trade showed some signs of recovery, and rapid technological advancements in fields such as artificial intelligence and new energy gave rise to numerous new industrial forms and business models, driving the transformation of traditional industries towards digitalization and greening, and injecting a continuous stream of new impetus into economic growth.
The global economy is facing strong headwinds, primarily due to escalating trade tensions and rising global policy uncertainty. For emerging market and developing economies (EMDEs), the bleak outlook has hampered their ability to promote job creation and reduce extreme poverty. Weak foreign direct investment in EMDEs further complicates this challenging environment. Global cooperation is needed to restore a more stable global trade environment and expand support for vulnerable countries, including those in fragile and conflict-ridden situations. Domestic policy measures are also crucial for curbing inflation risks and enhancing fiscal resilience. To unlock the potential for job creation and long-term growth, reforms should focus on improving institutional quality, attracting private investment, and strengthening human capital and the labor market.
Global Outlook
Global growth is slowing as trade barriers rise sharply and policy uncertainty increases. Growth is projected to fall to 2.3% in 2025, a significant downward revision from previous forecasts, with only a tepid recovery expected in 2026-2027. Growth could be even lower if trade restrictions escalate or policy uncertainty persists. Other downside risks include slower-than-expected growth in major economies, escalating conflicts, and extreme weather events. Multilateral policy efforts are needed to create a more predictable and transparent environment for resolving trade tensions. Policymakers need to control inflation and strengthen fiscal positions, while also implementing reforms to improve institutional quality, stimulate private investment, and improve human capital and labor market performance.
Major Energy Commodity Trends
International Crude Oil
As a highly cyclical commodity, crude oil prices are determined in the long term by changes in global economic fundamentals, in the medium term by actual supply and demand, and in the short term by factors such as capital flows and geopolitical conflicts. Starting in the first quarter of 2020, the COVID-19 pandemic rapidly swept the globe. Major economies implemented numerous targeted lockdown measures to combat the spread, profoundly altering social and economic order and essentially halting economic growth. The deep short-term economic recession caused by the pandemic led to a precipitous drop in market demand for crude oil, making it difficult to mitigate the risk of crude oil "inventory overload." Influenced by inventory costs, crude oil prices plummeted, with futures prices even falling into negative territory.
Coal
From January to September 2020, affected by the pandemic's disruption of supply and demand, coal prices experienced three phases: upward, downward, and then a sustained rise. In the first quarter of 2020, due to the pandemic, the resumption rate of coal production enterprises was low, resulting in tight market supply and a continuous slight increase in coal prices. Entering the second quarter, as the domestic epidemic was effectively controlled and social resumption of work and production proceeded in an orderly manner, coal production in various producing areas rebounded rapidly. However, economic growth had not yet returned to normal levels, so downstream demand in the coal market remained at a relatively low level. Coupled with the significant accumulation of coal imports in the previous period, the market experienced a short-term oversupply, leading to a continuous decline in coal prices. Since the third quarter, the economy has continued its recovery, with the growth rate basically returning to pre-pandemic levels. The weak demand for coal has improved, and coupled with factors such as reduced imports and tight supply in producing areas, coal prices have once again shown a strong upward trend.
