The world economy heads to the new year in a better state than at the start of 2024, according to the bank.

Global economy overcame several challenges to head to 2025 in a better condition compared to the previous year end, according to the Qatar National Bank (QNB), as most advanced economies witnessed positive conditions compared to the start of this year.

In its final weekly commentary of the year, QNB noted that the global economy once again outperformed pessimistic projections to end the year at a modest growth rate of around 3.1 per cent.

The end of 2023 had seen a global growth rate of 2.8 per cent, just shy of the global recession threshold of 2.5%.

“Economic weakness across major advanced economies dominated the global macro agenda,” QNB’s statement read, further detailing the backdrop at the start of 2024. “A rapid slowdown in the U.S., disappointing growth in China and continuous stagnation in Europe provided a gloomy environment for 2024.”

Subsidies put in place to curtail climbing unemployment rate brought an “inflation scare” which led to conservative predictions and spurring of “significant uncertainty about the path and even the direction of policy rates”.

However, as the year progressed, the gradual normalisation of inflation, stabilisation across advanced economies such as China, and easing of the monetary cycle improved the conditions, it added.

“The year ended up being defined by a more positive backdrop of moderate global growth of 3 percent combined with falling inflation across most advanced economies and significant monetary policy easing,” QNB said.

Advanced economies such as the U.S., China, and the Euro area have a positive headway going into the new year, according to the bank, which is considered to be the Gulf’s biggest in terms of the assets owned.

“The estimated global growth of 3.1 per cent for 2024 is a significant achievement […] Labour markets eased gradually and remained resilient while inflation moderated. This triggered a change in sentiment and led to a turnaround of outlook later in the year.”

QNB further points out how China, after a rough patch with a sluggish real estate market and low consumer confidence, introduced a major stimulus plan to give the economy a boost. The new measures, drummed up after September, included steps like injecting money into state banks, lowering interest rates, cutting reserve requirements, increasing government spending, and supporting the real estate and stock markets. 

“All in all, the global economy proved once again to outperform pessimistic expectations from analysts, just like in 2023. Positive conditions across most advanced economies with the gradual normalisation of inflation, a monetary easing cycle and a stabilised Chinese economy favoured a moderate global growth of around 3.1 percent,” QNB asserted.