Plan for growth, prepare for volatility

Outlook 2025Plan for growth, prepare for volatility

Macroeconomic outlook

The US economy has proved to be resilient, and 2025 is expected to be a year characterized by strong global growth. Although policy could be unpredictable and the fight against inflation may continue, the year should still be favorable for returns, primarily driven by consumer spending and declining interest rates.

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A resilient global economy theme icon

A resilient global economy

Global GDP growth has held up remarkably well after a difficult 2023

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Developed-world consumer a mainstay of growth theme icon

Developed-world consumer a mainstay of growth

Consumer demand suggests 2025 should be strong for corporate investment

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Inflation is a more nuanced story theme icon

Inflation is a more nuanced story

Temporary factors have influenced developed-world disinflation

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The global economy has shown remarkable resilience in recent years, growing at around its post-2000 average, despite being buffeted by several large shocks. With the ripple effects of these shocks now petering out, this bodes well for the growth outlook for 2025.

The global economy has shown remarkable resilience in recent years

A resilient global economy chart

Source: International Monetary Fund (November 2024).

With real incomes rising rapidly, labor markets robust, interest rates falling, and credit conditions loosening, the consumer is in very good fundamental shape. The plethora of new technologies and innovations coming through – artificial intelligence (AI) included – is also opening up new vistas of investment opportunities for businesses.

Real incomes are rising rapidly across the developed world

Developed-world consumer a mainstay of growth chart

Source: Macrobond (November 2024).

In 2025, goods prices may not be the deflationary force they were in 2024, not just because of the tariffs (which could add 1-2 percentage points to inflation) but also because China may stop exporting deflation. Both headline and core inflation could be more buoyant, and therefore more challenging for policymakers, than markets and investors are currently assuming.

Goods inflation could turn around in 2025

Inflation is a more nuanced story chart

Source: Macrobond (November 2024). CPI = Consumer Price Index.

5 Actionable ideas for 2025

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Outlook 2025 webinar

Hear from our panel of experts as they discuss actionable ideas that can help investors navigate the anticipated volatility while remaining focused on growth opportunities in the months ahead.

January 13, 2025 | 1:00pm EST

Listen to our podcast

As we anticipate ongoing volatility, strong growth is still expected in the year ahead. Macquarie Asset Management’s Daniel McCormack, Head of Research, and Derek Hamilton, Economist, discuss growth drivers, concerns about inflation, and potential investment opportunities in 2025.

Message to investors

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We expect further moderation of interest rates and robust economic growth in 2025, but we continue to believe we’ve transitioned to a ‘new normal’. A normal where neutral rates are likely to remain elevated relative to the past decade.”

Ben Way

Group Head, Macquarie Asset Management

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