Raad Mahmoud Al-Tal

The global economy in 2025 unfolded under extraordinary pressure, marked by overlapping shocks that tested the structural strength of nations worldwide. Persistent geopolitical conflicts, slowing economic momentum, mounting debt burdens and severe climate disruptions combined to create an environment of deep uncertainty. Yet, contrary to widespread expectations of stagnation or crisis, the global economy demonstrated a level of resilience that surprised many observers particularly across developing and emerging markets.

At the start of the year, optimism quickly faded as trade tensions intensified, policy uncertainty persisted, and debt vulnerabilities in low- and middle-income countries deepened. For the third consecutive year, developing economies paid more in external debt service than they received in new financing an imbalance unseen in five decades. Such conditions typically signal economic contraction. However, 2025 defied this historical pattern.

Global growth remained intact, with expansion estimated at approximately 2.7 per cent, aligning with early projections despite restrictive global conditions. Several factors underpinned this outcome: a gradual easing of financial conditions, renewed access to bond markets, stabilisation in energy prices, and adaptive restructuring of global supply chains. Equally important was the rapid diffusion of digital technologies, particularly artificial intelligence, which enhanced productivity and operational efficiency across sectors.

Beyond macroeconomic indicators, 2025 marked a strategic shift in development thinking. Policymakers and international institutions increasingly recognized that job creation not short-term stimulus or emergency aid constitutes the most durable foundation for economic stability. Employment emerged as the central mechanism through which growth translated into social cohesion, poverty reduction, and long-term resilience.

Jobs play a multidimensional role in economic systems. They generate income, strengthen domestic demand, reduce dependency on public assistance, and reinforce social stability. This focus became especially urgent in light of the unprecedented demographic transition underway. Over the next decade, an estimated 1.2 billion young people in developing countries will reach working age. Whether this demographic wave becomes a dividend or a destabilizing force depends almost entirely on the availability of productive employment opportunities.

In response, economic strategies in 2025 increasingly converged around a set of sectors with high employment elasticity and strong spillover effects. Energy and infrastructure emerged as critical enablers of growth, particularly in regions where unreliable electricity continues to constrain productivity. Large-scale electrification initiatives aim to unlock private investment, expand small business activity, and improve access to essential services.

Agriculture, which remains the backbone of employment in many developing economies, also gained renewed attention. Despite employing nearly 40 percent of the workforce, the sector suffers from underinvestment, limited access to finance, and low technological adoption. Recent transformation efforts have focused on integrating smallholder farmers into value chains, improving access to markets, and leveraging digital tools to boost productivity and incomes while strengthening global food security.

Healthcare investment proved equally strategic. Strong health systems not only improve human well-being but also enhance labor productivity and generate employment across medical services, pharmaceuticals, logistics, and technology. Expanding access to affordable primary healthcare has therefore become both a social and economic priority, reinforcing human capital development.

Tourism reemerged as a powerful engine of inclusive growth, particularly for women and youth. As one of the most labor-intensive sectors globally, tourism supports local entrepreneurship, stimulates urban development, and incentivizes the preservation of cultural and natural assets when managed sustainably.

Manufacturing and industrial development continued to serve as a cornerstone of structural transformation. By generating formal employment, strengthening export capacity, and reducing import dependence, manufacturing supports long-term economic diversification. Targeted investments in industries such as construction materials, chemicals, electronics, and machinery have expanded domestic supply chains while increasing fiscal revenues and employment opportunities, especially for women.

The experience of 2025 underscores a critical lesson: economic resilience does not emerge spontaneously. It is built through deliberate policy choices, sustained investment, and effective partnerships between the public and private sectors. As the global economy moves toward 2026, attention is shifting toward “smart development” strategies that prioritize productivity, fiscal sustainability, and job creation as interconnected objectives.

The defining achievement of 2025 was not the avoidance of crisis, but the demonstration that employment-centered growth can act as the world’s strongest economic shield. By investing in people, skills, and productive work today, economies lay the groundwork for a more stable, secure, and prosperous global future.