Investing.com — Goldman Sachs released its top seven macroeconomic forecasts for 2025, predicting a year marked by easing financial conditions, continued rate cuts and geopolitical uncertainties.
The investment bank forecasts divergent growth trajectories between the United States, the Eurozone and China, with the United States expected to outperform its developed market peers.
1) Global GDP growth: Goldman Sachs forecasts solid global real GDP growth of 2.7% year-on-year in 2025, driven by rising real household disposable incomes and easing financial conditions.
The report highlights the role of rate cuts, adding that “US growth will likely continue to outpace that of its developed market (DM) peers given its significantly stronger productivity growth.” Core inflation is expected to return to target levels in developed markets by the end of 2025.
2) US economic outlook: Goldman expects U.S. GDP growth to exceed consensus of 2.4% in 2025, citing robust income growth and financial easing. Core PCE inflation is expected to slow to 2.4% by December 2025, “reflecting a further slowdown in housing sector inflation and easing wage pressures, but a moderate boost from rising rates “.
The bank also expects the unemployment rate to fall slightly to 4% by the end of the year.
3) Federal Reserve Policy: Goldman Sachs predicts that the Federal Reserve will implement three rate cuts in 2025, with the first cut of 25 basis points arriving in March, followed by additional cuts in June and September.
This would bring the terminal rate to 3.5-3.75%. The bank also expects the Fed to scale back its balance sheet cleanup in January and conclude it by the second quarter of 2025.
4) Growth of the euro zone: Goldman forecasts below-consensus GDP growth of 0.8% for the euro zone, reflecting “persistent structural headwinds in manufacturing” from high energy prices and competitive pressure from China.
Fiscal tightening and trade policy uncertainties are expected to weigh on growth. Inflation is expected to return to 2% by the end of the year, with a gradual slowdown in services inflation.
5) ECB political outlook: The European Central Bank is expected to make sequential cuts of 25 basis points, bringing the policy rate to 1.75% by July 2025. However, Goldman notes potential downside risks, warning that “faster cuts and deeper” might be needed if growth and inflation weaken. further away.
6) The economic slowdown in China: In China, Goldman Sachs forecasts that real GDP growth will slow to 4.5% in 2025, as policy easing measures fail to fully offset weak domestic consumption, a struggling real estate market and impact of the increase in American customs tariffs.
“Longer term, we remain cautious about China’s growth prospects given several structural challenges, including deteriorating demographics, a multi-year trend toward deleveraging, and reduced global supply chain risks.” , noted the Wall Street firm.
7) American politics and geopolitical risks: Finally, Goldman advises investors to closely monitor U.S. policy changes and geopolitical developments, particularly if Donald Trump secures a second term.
Key risks include higher China and auto tariffs, lower immigration, tax cuts and regulatory rollbacks.
Goldman warns that while tax cuts could boost growth, “the negative impact of rising tariffs” could offset those gains as Europe and China face greater economic challenges. The report also highlights risks related to the situation in the Middle East, the war between Russia and Ukraine and relations between the United States and China.
