2025’s economic slowdown clashes with record clean energy and AI growth
The year 2025 brought a mix of economic challenges and rapid shifts in energy and technology. Global growth slowed, while climate extremes and geopolitical tensions reshaped trade and daily life. Amid the uncertainty, clean energy and artificial intelligence emerged as defining forces in business and policy decisions.
Economic growth weakened slightly in 2025, with projections dropping from 3.3% in 2024 to 3.2%. Some forecasts even suggested a low of 2.3%, reflecting broader instability. Foreign direct investment also declined by 3% in the first half of the year, extending a years-long downward trend.
Trade disputes intensified, leading to tariff wars that disrupted supply chains and triggered geopolitical realignments. The ripple effects reached businesses and households, turning uncertainty from a broad economic issue into a daily concern for governments and families alike. Climate change dominated headlines as 2025 ranked among the warmest years on record. India faced extreme weather on 99% of days in the first eleven months, damaging 17.4 million hectares of crops and causing over 4,000 deaths. Despite the challenges, the country pushed ahead with its energy transition, aiming for 500 GW of renewables by 2030 and net zero emissions by 2070. By 2025, it had already installed 250 GW of renewable capacity. Renewable energy remained a bright spot globally, accounting for over 90% of new power capacity in 2024. Investment in clean energy surpassed USD 2 trillion in 2025, with solar and wind becoming more affordable than fossil fuels. Meanwhile, artificial intelligence adoption surged, with 78% of organisations integrating AI into operations, supply chains, sales, and content creation.
The year highlighted deep contrasts: slowing economies and climate crises alongside record clean energy growth and AI expansion. Governments and businesses now face the task of navigating trade tensions, extreme weather, and technological change. The outcomes of these shifts will shape policies and markets in the years ahead.
