The global economic outlook for 2025 suggests a resilient landscape despite various challenges.
The latest outlook report from UBS Global Wealth Management, titled "Year Ahead 2025: Roaring 20s," highlights positive economic indicators that indicate resilience in the face of adversity. Global stock markets have seen significant growth since the early 2020s, with nominal GDP and U.S. corporate profits also increasing.
The report acknowledges that the current geopolitical climate, particularly under the Trump administration, could significantly impact the U.S. economic landscape. Tariffs, trade dynamics, and inflation may be affected, but negotiations and legislative actions are expected to mitigate these effects. Tax cuts and deregulation are also anticipated to create a more favorable market environment.
Regional growth projections for 2025 show diverging paths. The U.S. is expected to experience solid growth with a projected GDP increase of 1.9%. In contrast, the Eurozone is expected to have subdued growth at 0.9%. Switzerland, the United Kingdom, and Spain are forecasted to achieve growth rates above 1%, while Germany, France, and Italy are expected to hover around the 1% mark. In Asia, China's growth is projected to slow to 4%, while India is set to maintain robust growth at 6.3%.
Inflation rates are also expected to decline globally, with the average dropping from 5.8% in 2024 to 3.3% in 2025. The U.S. is projected to see a decrease from 3% to 2.6%, while the Eurozone's inflation is expected to fall from 2.4% to 2.1%. Switzerland is anticipated to maintain a low inflation rate of 0.8%.
Switzerland's economy is projected to grow by 1.3% in 2025, demonstrating resilience amidst global challenges. The country has received positive assessments from international observers, despite domestic criticisms of its growth performance. The Swiss economy has consistently outperformed the average of advanced economies, with a growth rate of 2% between 2006 and 2015. Recent data indicates a 0.2% growth in the third quarter of the year, with a year-on-year increase of 1.3%.
The Swiss economy is diversified across various sectors, including industry, trade, and finance, which contributes to its balanced economic performance. Analysts emphasize the importance of considering overall results rather than focusing solely on quarterly fluctuations. The UBS report identifies five key trends—debt, deglobalization, demographics, decarbonization, and digitization—as critical factors that will shape markets and economies in the coming years. These trends present both opportunities and risks, with the potential for higher growth and inflationary pressures. The global stock market index is expected to continue its upward trajectory, driven primarily by the U.S. stock market, while the Swiss stock market is projected to see moderate gains.
In the currency markets, the U.S. dollar may experience slight declines against the euro, while the Swiss franc is expected to remain strong against the U.S. dollar and stable against the euro. The UBS report also highlights gold and real estate, particularly in logistics, data centers, and multifamily housing, as promising investment avenues in the current economic climate.
Overall, the outlook for 2025 remains cautiously optimistic, with a focus on resilience and adaptability in the face of ongoing challenges.