The year 2024 is coming to an end, but political and economic uncertainties persist and are expected to continue into 2025, albeit in new forms. Donald Trump’s economic agenda is known. On the other hand, the measures that will actually be implemented, their timing and their economic impact are among the great known unknowns of 2025. In any case, uncertainty itself is expected to be a major drag on growth next year. A convergence of growth rates between the US and the Eurozone is expected in the course of 2025, via a slowdown in US growth. The latter would suffer from the inflationary effects of Trumponomics and the resulting more restrictive monetary policy, with the Fed's expected status quo on rates throughout 2025
On 20 January, Donald J. Trump will be sworn in as President of the United States for the second time.With him, there will be no "soft trade" or multilateralism, but a logic of nations governed by power relations.Faced with this new order, in which historic partners become rivals and alliances are now only circumstantial, what will Europe do?Between its desire to assert its power and its concern to protect its interests,Which card will China play? Will the "multi-aligned" countries such as India be able to maintain their position?Finally, as the United States prepares to withdraw from the Paris agreements once again, will the climate be the big loser?Find out more with this replay of the latest conference of the Economic Research department of BNP Paribas, held on 10 December.
The Main recent economic news.
Equity indices, Currencies & commodities, and Bond markets.
GDP growth, inflation, exchange and interest rates.
Would you expect a politician who promises to raise taxes on both households and corporates as a key plank of their growth strategy to get elected? Or the Parliament of an EU member state to vote against an EU initiative to cut such taxes? Probably not. And yet both just happened, with Donald Trump and fellow Republicans taking control of both the White House and Congress, and the French Parliament voting against the EU-Mercosur trade deal.
Equity indices, Currencies & commodities, and Bond markets
GDP figures for Q3 and recent economic data confirm the existing hierarchy among the major developed economies in terms of growth.
A slight rise in inflation was seen on both sides of the Atlantic this autumn. However, the resilience of services prices and the geopolitical risks anticipated for 2025 do not, at this stage, threaten a landing scenario for inflation. In our view, this should be achieved more quickly in the eurozone than in the United States and the United Kingdom.
Much has happened since Q4 Outlooks published in September cheeringly predicted, as a matter of consensus, that the global economy was heading for a soft landing after the sharpest inflation surge and most abrupt monetary tightening in decades. On the economic front, more data have been released, helpfully adding pixels to the growth, labour market and inflation pictures. On the politics and policy fronts, China unveiled a large stimulus package, the US voted in a new President and Congress, the UK released a radical 2025 budget, and France and Germany limped into new governing arrangements.
The economic slowdown in China and the implementation of its industrial policy will have large consequences for the rest of the world. Effects will vary from country to country, depending on the transmission channels. For emerging countries, the overall impact will not be necessarily negative, notably thanks to the foreign direct investment channel, which could well change the situation. We are discussing this with Christine Peltier.
GDP growth, inflation, interest and exchange rates.
According to recent economic data, the disparity in economic situations is confirmed, and even accentuated, between the United States, where growth is expected to remain strong in Q3 (0.7% q/q in Q3, according to our forecast) and other regions, notably the Eurozone, where the recovery is seemingly running out of steam (0.2% growth in Q3, according to our forecast and our nowcast).
After Katrina in 2005, Hurricane Helene, which hit the south-east of the United States at the end of September, was one of the most destructive climate events ever seen across the Atlantic (with more than 200 deaths and approximately USD 50 billion in property damage to date). Symbolically, the National Oceanic and Atmospheric Administration (NOAA) was one of the collateral victims of the disaster. As a result, its temperature readings, which are referenced across the world, temporarily stopped being published.
