Carolyn Nar
Investment Analyst
(GBSN)- The global economy faces slowing growth in 2025, with political and trade uncertainties, including tariffs, impacting demand. The US anticipates steady interest rates due to persistent inflation, while its manufacturing sector contracts. China maintains its 5% growth target, but struggles with weak domestic demand, a housing crisis, and export challenges. Europe expects a modest recovery, though geopolitical factors and trade uncertainties cloud the outlook.
United States
So, they’re expecting the economic growth to slow down in 2025 after it was pretty strong in 2024.
Political uncertainty and those tariffs are being pointed out as things that could really hit demand.
Looks like the Federal Reserve is probably going to keep interest rates steady for most of 2025 because they’ve had to bump up their inflation forecasts.
The manufacturing sector actually shrunk in March, with a noticeable drop in production and they’re still cutting jobs, which definitely suggests some economic headwinds.
New orders are still looking pretty weak.
China
They’re sticking with that economic growth target of around 5% for this year. Economic policy is going to stay supportive, with boosting private consumption being the main thing.
However, domestic demand is still being held back by the problems in the housing market and not a lot of consumer confidence.
The export sector is also going to take a hit from more protectionist measures.
They’ve still got deflationary pressures, although they’re predicting a slight increase in consumer inflation in the short term.
Europe
A modest economic recovery is expected in 2025 and 2026 after the growth in 2024 wasn’t as strong as they thought.
Geopolitical and trade uncertainty are also messing with the economic outlook for the region. So, basically, the global economy is at a bit of a turning point with moderate growth, inflation that’s sticking around, and increasing political and trade uncertainty. Tariff policies, how the big economies like the US and China are doing, and how the central banks react are going to be key things to watch for how the international economy plays out for the rest of 2025.
