There will be "another solid year of global economic growth in 2025," but that different countries will see different rates of growth, according to a Goldman Sachs forecast.
The investment bank's economic forecast for next year shows that India could see a significant growth in its economy, while a number of countries in Europe will see slower expansion in their GDPs.
Newsweek has contacted the Goldman Sachs press office via email for comment.
Why It Matters
After a difficult few years following the COVID-19 pandemic, the forecast is moderately optimistic for the global economy but expects mixed fortunes for different regions while predicting that new trade policies that could be brought in by President-elect Donald Trump could have a significant impact on economies outside the U.S.
What To Know
Of the countries the American investment bank made predictions for, India is expected to see the fastest expansion in GDP in 2025 at 6.3 percent. China is second with a predicted growth of 4.5 percent.
Germany is expected to see the smallest change to its GDP at 0.3 percent. France and Italy are expected to see their economies expand by less than 1 percent in 2025.
The U.S. economy is expected to continue to expand at a steady rate, at 2.5 percent, and Goldman Sachs predicted that the impact of Trump's new potential trade policies on the U.S. economy will be "small and largely offset by other factors."
It predicted that "the economic headwind from U.S. trade policy is expected to be greater outside the U.S."
Goldman Sachs predicted that Trump's potential tariffs will subtract almost 0.7 percentage points from China's economic growth in 2025, while its economists also reduced their forecast for the euro area by 0.5 percent after the U.S. election.
Overall, the predictions are largely similar to those made by Goldman Sachs in 2024, with the exception of Russia, which has the biggest change in forecast. As in 2024, the investment bank believed it would see a 3.5 percent growth in its economy, but in 2025, it predicted Russia would see only 1.2 percent growth.
What People Are Saying
Goldman Sachs Research Chief Economist Jan Hatzius, who wrote in the team's report titled "Macro Outlook 2025: Tailwinds (Probably) Trump Tariffs,": "We expect U.S. productivity growth to remain significantly stronger than elsewhere, and this is a key reason why we expect U.S. GDP growth to continue to outperform."
What's Next
Goldman Sachs predicted that global GDP will expand by 2.7 percent next year on an annual average basis, which is similar to the estimated expansion for 2024.
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