NEW YORK: World economic growth is anticipated to decelerate to 2.7% in 2025 from 2.9% in 2024, according to a forecast released by the International Institute of Finance (IIF) on Wednesday. The report highlights challenges such as reduced capital flows to emerging markets and geopolitical tensions affecting commodity prices as key factors contributing to the slowdown. According to Anadolu Agency, the IIF's analysis indicates that mature markets are expected to see a decrease in their GDP growth rate, with an average of 1.3% projected for 2025, down from 1.5% in 2024. The United States is expected to experience a growth rate of 1.9%, while the euro area's growth is projected at 0.6%. Emerging markets (EMs) are forecast to grow at 3.8%, with specific projections of 1.7% for Russia, 2.5% for Trkiye, and 4.2% for China. The institute also forecasts a significant decline in capital flows to emerging markets, predicting a drop to $716 billion in 2025 from $944 billion in 2024. This decrease is attributed to weak er flows to China, which experienced its first net foreign direct investment outflows in decades in 2024, with a similarly bleak outlook for 2025. Capital flows to non-China EMs are also expected to moderate, decreasing to $781 billion in 2025 from $824 billion in 2024. Geopolitical tensions, particularly in relation to US energy policies, are expected to contribute to uncertainty in commodity prices, according to the IIF's report. These factors are likely to add complexity to the global economic landscape as nations navigate the challenges of slower growth and fluctuating capital flows.