Economic Predictions for 2025: Expert Insights

For the past few years, we’ve compiled predictions for the new year from Atradius experts. This year is no different. After reflecting on last year’s forecasts, we’ve brought together fresh perspectives on what 2025 might hold. Here are the trends, challenges, and opportunities to watch as we approach a new year.

Eric Morgan, Risk Senior Manager

Expect uncertainty and volatility in 2025. From interest rates to trade policies, many variables remain up in the air. While President Trump won’t officially take office until January, significant shifts in trade policies are already underway. Trump has threatened substantial tariffs on Canada, Mexico, and China—three of America’s largest trading partners. While these threats appear to be negotiation tactics, they risk sparking retaliatory measures. For instance, China recently banned the export of rare earth metals to the U.S., signaling a potential trend for 2025 that could impact economies worldwide.

Interest rate decisions by the Federal Reserve and the European Central Bank will also be closely monitored as expectations evolve. Businesses that remain agile and adapt quickly to policy changes will find opportunities amidst the uncertainty.

Theo Smid, Senior Economist

The Draghi Report has brought competitiveness back to the forefront of Europe’s policy agenda, but achieving its ambitious goals will be an uphill battle.

Released in September 2024, the 400-page report by former ECB president Mario Draghi outlines a roadmap for tackling Europe’s economic stagnation. Recommendations include creating a European Advanced Research Projects Agency (ARPA), incentivizing seed capital, and building an integrated EU-wide capital market to fund high-risk ventures. Draghi proposes an annual investment of €800 billion—5% of EU GDP—to close the competitiveness gap with the U.S. and China.

However, the required joint debt financing has sparked division among EU leaders, particularly fiscally conservative countries like Germany and the Netherlands. Significant public investment at the level Draghi suggests is unlikely, leaving the EU’s economic trajectory in question.

Aaron Rutstein, Risk Director

I anticipate 2025 will bring continued volatility. The U.S. economy appears stable for now, but cracks are forming. Rising delinquencies and revolving credit balances suggest consumers are starting to feel stretched, even though holiday spending remained strong.

While inflation has eased from its peak, it still surpasses the Fed’s 2% target. This persistent issue was a key factor in voters electing Donald Trump to the presidency. Trump’s upcoming policies—tariffs, tax cuts, and potential mass deportations—introduce considerable uncertainty. With a favorable Congress, he may move more decisively this time, but whether these discussions are substantive or strategic remains unclear. Tariffs, in particular, will be closely watched for their potential to disrupt global trade.

Dana Bodnar, Senior Economist

Policy uncertainty is likely to increase under the new administration, with major shifts expected in trade, immigration, and fiscal policies. While these changes could negatively impact long-term growth, I expect another strong year for the U.S. economy in 2025, driven by resilient private consumption.

The U.S. economy relies heavily on consumption, and key indicators like household balance sheets and labor market strength remain historically robust. Consumer confidence continues to improve, suggesting a positive outlook for the year ahead.

Anticipation for 2025

The outlook for 2025 reflects a mix of optimism and caution. Gordon Cessford, President of Atradius North America, notes, “The U.S. economy is expected to grow by 2.5%, with inflation around 2.1% and unemployment at 4.2%. Be sure to check out our December 2024 Economic Outlook for more on this as well. The new administration’s fiscal policies, including extended tax cuts, will support this growth.” However, he emphasizes the risks tied to upcoming tariffs and potential mass deportations, which could affect inflation, employment, and trade. Read one of our most recent blog posts focusing on the potential outcome of the election here. “We hope for calm waters,” Cessford adds, underscoring the uncertainty that will shape the year ahead.

As businesses navigate these shifting dynamics, resilience and adaptability will remain essential. Whether seizing opportunities or managing risks, 2025 promises to test the global economy’s agility and innovation.