Investing.com – Goldman Sachs has identified its top seven macroeconomic forecasts for 2025, anticipating a year shaped by easing financial conditions, continued interest rate cuts, and geopolitical uncertainties.
The investment bank expects different growth paths between the United States, the Eurozone and China, with the United States expected to outperform its counterparts in developed markets.
1) Global GDP growthGoldman Sachs expects strong global real GDP growth of 2.7% year-on-year in 2025, driven by rising real household disposable income and easing financial conditions.
The report highlights the role of interest rate cuts, adding that “US growth is likely to continue to outpace developed market counterparts given significantly stronger productivity growth.” Core inflation is expected to return to target levels in developed markets by the end of 2025.
2) US economic expectations: Goldman forecasts US GDP growth of 2.4% in 2025 above consensus, citing strong income growth and fiscal easing. Core PCE inflation is expected to slow to 2.4% by December 2025, “reflecting a further deceleration in housing inflation and an easing of wage pressures but with a moderate boost from higher tariffs.”
The bank also expects the unemployment rate to fall to 4% by the end of the year.
3) Federal Reserve policyGoldman Sachs expects the Fed to implement three interest rate cuts in 2025, with the first 25 basis point cut arriving in March, followed by additional cuts in June and September.
This would raise the interest rate to 3.5-3.75%. The bank also expects the Fed to reduce its balance sheet runoff in January and conclude it by the second quarter of 2025.
4) Growth in the euro area: Goldman expects below-consensus GDP growth of 0.8% for the euro area, reflecting “continuing structural headwinds in the manufacturing sector” due to rising energy prices and competitive pressures from China.
Tighter fiscal 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) European Central Bank policy expectations: The European Central Bank is expected to proceed with sequential interest rate cuts of 25 basis points, taking the interest rate to 1.75% by July 2025. However, Goldman Sachs notes potential downside risks, warning that “faster and deeper cuts” may Necessary if growth and inflation are poor. additional.
6) Economic slowdown in ChinaIn China, Goldman Sachs expects real GDP growth to slow to 4.5% in 2025, as policy easing measures fail to fully offset weak domestic consumption, real estate market struggles, and the impact of higher US tariffs.
“Longer term, we remain cautious about China's growth outlook given several structural challenges, including deteriorating demographics, a multi-year deleveraging trend, and de-risking in the global supply chain,” the Wall Street firm noted.
7) American policy and geopolitical risksFinally, Goldman advises investors to closely monitor changes in US policy and geopolitical developments, especially if Donald Trump gets a second term.
Key risks include higher tariffs on China and cars, lower immigration, tax cuts, and regulatory rollbacks.
Goldman warns that while tax cuts could boost growth, “the impact from higher tariffs” could offset those gains, as Europe and China face bigger economic hits. The report also points to risks arising from the situation in the Middle East, the war between Russia and Ukraine, and relations between the United States and China.
