The Horizon: Structural Stress
Week of 21 November 2025 - Slowest G20 expansion since 2009, Europe’s strategic divisions over Ukraine, EU growth exceeds expectations, and Japan’s economy contracts
Top Signal: IMF Warns of the Slowest G20 Expansion Since 2009
This week, the International Monetary Fund projected that G20 economies will grow by just 3.2% in 2025, and this growth is expected to slow even further to 3.0% in 2026. Medium-term growth is projected at 2.9% which would be the weakest medium-term trajectory since the global financial crisis. In its report to the G20, it points to rising protectionism, public-debt burdens, demographic challenges, and political uncertainty as core drags on productivity and trade. It said that international cooperation has an important role to play in restoring confidence, predictability, and growth prospects.
G20 leaders are due to meet in South Africa this weekend. However, it has been reported that political leaders from several member countries, such as the US, China, and Mexico, are not planning to attend the gathering. IMF Reuters
Key Signals
Europe’s Strategic Divisions Over Ukraine: At the EU foreign ministers’ meeting this week, there was resistance to a US-backed plan to end the war in Ukraine, reportedly being drafted behind closed doors with Russia. First reported in US media, it apparently includes terms that would be highly disadvantageous for Ukraine. Meanwhile, member state Hungary has called for halting EU funding to Kyiv after corruption reports. Euronews Reuters
EU Growth Exceeds Expectations, But Headwinds Remain: Staying with Europe, the European Commission announced this week that economic growth exceeded expectations in the first nine months of 2025, with real GDP growth outperforming the projected annual expansion announced in the spring, as exporters looked to get ahead of tariffs and significant investments were made in equipment and intangible assets. This outcome was also supported by a resilient labour market, decreasing inflation, and favourable financing conditions.
The EU is projecting real GDP to grow in the eurozone by 1.3% in 2025, 1.2% in 2026, and by 1.4% in 2027. Meanwhile, in the wider 27-member EU, growth is projected at 1.4% in this year and next, and then projected to increase to 1.5% in 2027.
However, headwinds remain. The external trade environment remains persistently uncertain, disruptions to supply chains may be greater than initially expected, and volatility in global financial markets could increase. The EU also remains concerned about the economic impact of continuing high geopolitical tensions and the increased frequency of climate-related disasters. Moreover, public debt is an issue in several member states; four of whom are set to have debt ratios above 100% of GDP. However, increased defence spending focused on European production and potential new trade agreements could help drive growth.
Japan’s Economy Contracts in Q3: Meanwhile, in Asia, we learned this week that Japan’s real GDP shrank 1.8% annualised in Q3 2025, the first contraction in six quarters, as exports and consumption weakened in the world’s fourth-largest economy. Japan Times
Systems Insight
This week’s signals reveal a global economy that is entering a more challenging phase. Across regions, from the IMF’s warning on slower G20 growth to Europe’s political disagreements and Japan’s contraction, the signals are consistent in indicating that the world is slowing down together.
The IMF’s forecast, Europe’s fragile recovery, and Japan’s decline seem to point to the end of easy growth. Economic and political systems are converging toward a slower and more uncertain vibe. What we’re potentially witnessing is not a temporary dip, but the shaping of a new normal where structural constraints, rather than cycles, define performance.
But as growth weakens,