In a recent report, Goldman Sachs identified 7 main axes that will affect the global economy during the year 2025.
These themes address the growth of major economies, monetary policies, and geopolitical challenges, providing a comprehensive vision of the future of the global economy.
1. Global economic growth
Goldman Sachs expects a year of stable global economic growth thanks to easing financial conditions and rising real income. However, some regions face structural challenges that may hinder their performance.
- Global GDP is expected to grow by 2.7% in 2025.
- Developed markets will benefit from a return of inflation to target levels and improved economic conditions.
2. The American economy
The bank’s forecasts highlight that the United States will continue to outperform its advanced economies, driven by rising productivity and easing financial constraints.
- US GDP is expected to grow by 2.4%, which is higher than the global average.
- Core inflation will fall to 2.4%, with the unemployment rate stable at 4%.
3. Federal Reserve policies
The report expects the Federal Reserve to take a more flexible approach to its monetary policies, with a focus on supporting financial stability, and according to Goldman Sachs:
- The Federal Reserve will make 3 interest rate cuts during the year, which will lower the final rate to between 3.5% and 3.75%.
- The balance sheet reductions will end by the second quarter of the year.
4. Eurozone economy
According to Goldman Sachs, the eurozone economy will face major challenges, including pressures on the manufacturing sector and rising energy prices. Despite these obstacles, slight improvement is expected.
- Expected growth in the euro area is just 0.8%, reflecting continuing structural difficulties.
- Inflation is expected to return to 2% by the end of the year, with a gradual slowdown in services sector inflation.
5. European Central Bank
The Goldman Sachs report expects that the European Central Bank will take steps to gradually reduce interest rates, but it may have to accelerate these steps if economic pressures increase. The report expects:
- Interest rates fall to 1.75% by mid-year.
- Additional cuts may be needed if economic challenges persist.
6. Slowdown in China
China is expected to face a difficult year amid weak domestic consumption and problems in the real estate sector. Long-term structural challenges represent an obstacle to growth, according to Goldman Sussex, and two main axes stand out:
- Economic growth declines to 4.5% in 2025.
- Structural problems such as mounting debt and deteriorating demographics will affect economic performance.
7. Geopolitical risks
The year will witness an escalation in geopolitical tensions, especially in light of tough American policies that may include increased tariffs and changes in immigration policies, and Goldman Sachs expects that:
- The United States imposes higher tariffs on China and its auto industries, creating major economic challenges.
- International relations, including the situation in the Middle East, represent an additional factor of pressure on global economies.
