In 2025, geopolitics, potential policy changes from the US and demographic shifts will be the three key drivers shaping the global economic and consumer landscape. Economies, businesses and consumers will face both challenges and opportunities arising from sluggish economic and income growth, increasing trade protectionism and tariff risks, regulatory pressure, consumer cautiousness, and the growing influence of the 65+ age group.
Global growth to remain stable but sluggish with multiple downside risks
Aleksandra Svidler – Senior Consultant
The global economy is projected to grow steadily by 3.2% in 2025, supported by easing inflation and lower interest rates. Falling costs and improving financing conditions are expected to provide some relief, boosting investment and consumer spending. However, growth will likely remain sluggish, falling short of the pre-pandemic 10-year average of 3.7%. Rising geopolitical risks and economic fragmentation, and lingering uncertainties continue to weigh on business and consumer sentiment.
Moderating inflation and monetary easing, alongside stabilised supply chains, create a foundation for cautious optimism. In 2025, businesses must adapt to a slower growth environment and address heightened risks by building operational resilience, focusing on cost efficiency, leveraging innovative solutions to enhance productivity and exploring untapped markets.
Trump’s economic policy to impact global growth, supply chain and consumer prices
Lan Ha – Head of Economies and Consumers Insights
The economic agenda implemented by US President Donald Trump in his second term will shape the macroeconomic narrative in 2025 and beyond, with potential tax, immigration and tariff shifts impacting everything from consumer spending to supply chain resilience.
Trump’s proposed tax cuts can deliver short-term boosts to business investment and consumer income in the US. However, in the medium term, the positive effects of tax cuts could also be offset by the negative impacts of supply-side constraints resulting from Trump’s other policies, namely increased tariffs and immigration controls. If Trump’s pledges on tariff hikes materialise, global trade tensions will rise with retaliation and increased trade protectionism that can go beyond the US and China.
Under a Total Trump Agenda scenario, global economic growth could be slashed by a total of 2.5 percentage points from the baseline in the first three years of shock
Source: Euromonitor International