- Global: Global GDP growth outlook remains positive despite headwinds from elevated interest rates and geopolitical tensions
- Japan: Steady wage growth to drive gradual recovery in private consumption, offsetting some of the negative impacts from slower export growth
- Singapore: Resilient economy supported by global tech and electronics upcycle, and global reduction of interest rates
- Taiwan: Demand for AI-enabled mobile phones, PCs, and other consumer electronics could increase in 2025, supporting export growth
Related insights
Global: Broadly stable outlook ahead. Despite a general source of unease due to the prevalence of relatively high interest rates and heightened geopolitical risks, the global economy remains on a broadly comfortable expansionary path. Global growth is slated to be around 3.25% in 2024, not much different from the outcome in 2023 or the forecast for 2025. Yet, within that picture lies considerable heterogeneity. Many economies were struggling with high inflation just a couple of years ago, while some have been experiencing a downshift in growth dynamism.
This week, Fed officials have reinforced its latest narrative for a careful approach to future rate cuts. They pointed to PCE core inflation remaining high (2.8% y/y in December) amid a resilient US economy, a stabilising labour market, and stalling disinflation. The Federal Open Market Committee (FOMC) minutes also drew attention to a possible delay in returning inflation to the 2% target because of President-elect Donald Trump’s proposed policies on tariffs, tax cuts, and immigration. Hence, pay attention to today’s University of Michigan Consumer Sentiment Survey, which recently reported a rise in one-year inflation to 2.8% in December after six months of declines, alongside the highest level of consumer confidence since April.
The US election result and its implications for Europe will be a key focus area in 2025. There is ample uncertainty surrounding upcoming tariffs under the Trump 2.0 presidency, the extent of US support for Ukraine in the ongoing conflict, and an anticipated bout of deregulation in the US. On the trade front, linkages run deep. A clear overhang can be found in President Trump’s threat of a blanket 10% tariff, which would affect the EU since its largest export market is the US – not to mention the fact that many EU member countries are running deficits. Meanwhile, there is the second derivative impact of slower growth in China and other trading partners.
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