Annual look-ahead highlights a more
challenging economic outlook
NEW
YORK, Dec. 17, 2024 /PRNewswire/ -- Policy
uncertainties dominate the economic outlook, damaging growth
prospects, according to an S&P Global Market Intelligence
report released today. In the newly published Top 10 Economic
Insights for 2025, S&P Global Market Intelligence
economists provide their take on global and regional economic
performance, inflation and monetary policy prospects and highlight
key risks.
"Heading into 2025, the focus is squarely on post-election
policy shifts in the U.S. and their broader economic
implications," said Ken Wattret, Global Economist, S&P
Global Market Intelligence. "With renewed inflationary
pressures expected to pause the Fed's easing cycle, global
financial conditions are going to be much less accommodative than
previously expected. This spells trouble for economic growth; we
are lowering our forecasts pretty much across the board."
S&P Global Market Intelligence's Top 10 Economic Insights
for 2025 include:
- U.S. Economic Outlook: Although the U.S. economy is
still forecast to experience a soft landing, downside risks have
increased, related to labor shortages and potential tariffs. The
Federal Reserve is expected to pause its easing cycle in
mid-2025.
- Mainland China Growth: Growth in mainland China is expected to slow, impacted by a
potential increase in tariffs on exports to the U.S. and property
sector challenges. Despite additional stimulus measures, annual GDP
growth is likely to fall short of the government's target.
- Western Europe Conditions: Export-sensitive Western
European economies face increased risks of technical recessions due
to potential disruption to traditional trade patterns and political
instability. Central banks in the region are forecast to continue
to lower their policy rates.
- Emerging Economies Growth: Emerging economies will
contend with less favorable financial conditions. Key growth
drivers in some regions will differ from the norm.
- Divergent National Inflation Dynamics: Renewed
inflationary pressures are expected in the U.S. given the expected
policy shifts, while disinflationary forces are forecast to persist
in Western Europe and mainland
China.
- Core Inflation Trends: Goods inflation is expected to
remain low in the very short term, but should tariffs increase,
they will exert upward pressure in 2025. A further moderation in
services inflation will therefore be key to keeping core inflation
rates low.
- Commodity Price Trends: Crude oil and non-energy
commodity prices are forecast to mitigate some of the inflationary
impetus should tariffs increase.
- Global Financial Conditions: The projected pause in
monetary policy easing by the U.S. Federal Reserve means less
accommodative global financial conditions, dampening growth along
with structural headwinds.
- U.S. Dollar Strength: The U.S. dollar's elevation will
persist. The Mexican peso's underperformance is expected to
continue, while widening interest rate differentials and weak
economic conditions will weigh on the euro and UK pound. The yen is
forecast to outperform, given continued monetary policy
divergence.
- Fiscal Deficits and Debt Concerns: Persistent high
fiscal deficits will aggravate already elevated debt burdens, with
less favorable relative growth and interest rate dynamics posing an
increasing risk to debt sustainability.
To request a copy of S&P Global Market Intelligence's Top
10 Economic Insights for 2025, please contact
press.mi@spglobal.com.
S&P Global Market Intelligence's opinions, quotes, and
credit-related and other analyses are statements of opinion as of
the date they are expressed and not statements of fact or
recommendation to purchase, hold, or sell any securities or to make
any investment decisions, and do not address the suitability of any
security.
About S&P Global Market Intelligence
At S&P Global Market Intelligence, we understand the
importance of accurate, deep and insightful information. Our team
of experts delivers unrivaled insights and leading data and
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conviction.
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Global (NYSE: SPGI). S&P Global is the world's foremost
provider of credit ratings, benchmarks, analytics and workflow
solutions in the global capital, commodity and automotive markets.
With every one of our offerings, we help many of the world's
leading organizations navigate the economic landscape so they can
plan for tomorrow, today. For more information, visit
www.spglobal.com/marketintelligence.
Media Contact
Kate Smith
S&P Global Market Intelligence
+1 781 301 9311
Katherine.smith@spglobal.com or
press.mi@spglobal.com
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SOURCE S&P Global Market Intelligence