Developments in the global economy
Our planning is based on the assumption that global economic output will grow overall in 2025 at a slightly slower pace than in 2024. Declining inflation in major economic regions and the resulting easing of monetary policy are expected to boost consumer demand. We continue to believe that risks will arise from increasing fragmentation of the global economy and protectionist tendencies, turbulence in the financial markets and structural deficits in individual countries. In addition, continuing geopolitical tensions and conflicts are weighing on growth prospects; risks are associated in particular with the Russia-Ukraine conflict and the confrontations in the Middle East, and the increasing uncertainties regarding the political orientation of the USA. We assume that both the advanced economies and the emerging markets will record somewhat weaker momentum on average than that of the reporting year.
We also expect the global economy to continue on a path of stable growth until 2029.
Europe/Other Markets
In Western Europe, we expect the economy to grow at a similar rate in 2025 to in the reporting year, with a further decline in the average inflation rate. The associated key interest rate cuts by the European Central Bank (ECB) will likely support the eurozone economy.
For Central Europe, we estimate a somewhat higher growth rate for 2025 than in the previous year, with persistently high though less dynamic price increases. Economic output in Eastern Europe should continue to recover following the heavy slump in 2022 as a result of the Russia-Ukraine conflict.
Germany
We expect gross domestic product (GDP) to develop positively in Germany in 2025, albeit with less momentum. The German inflation rate is likely to decline somewhat on average for the year. The labor market situation is likely to deteriorate somewhat.
North America
We anticipate continued stable economic growth in the USA in 2025, albeit with slower momentum, accompanied by a corresponding deterioration of the labor market situation. The US Federal Reserve is likely to implement further key interest rate cuts in the course of 2025 even though a slight increase in inflation is expected. Compared with the reporting year, economic growth is likely to be somewhat higher in Canada, while in Mexico it is expected to remain roughly the same.
South America
In all probability, the Brazilian economy will record a positive rate of growth in 2025, although it will be lower than that of the reporting year. Following two years of decline, Argentina is expected to show positive growth in 2025.
Asia-Pacific
Chinese GDP is expected to grow at a relatively high level in 2025, albeit at a lower rate than in 2024. India’s economic growth will likely see momentum on a par with the reporting year, while Japan’s economic output is expected to grow again compared with 2024.