Navigating Economic Uncertainty: Key Trends For 2025 Navigating the uncertainties of 2025 will require strategic fiscal interventions, enhanced supply chain resilience, and investments in technology and infrastructure
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In 2024, the global economy was influenced by rising geo-political tensions, changing trade patterns, and various economic changes. Key factors included shifts in monetary policies and the growing decoupling between the US and China. These trends will continue to impact the economy in 2025 and beyond.
KEY THEMES IN 2024 The 2024 US election caused global economic uncertainty, with the US dollar strengthening due to the possibility of Trump returning to office and heightened trade anxieties over potential tariffs. Tensions with China grew after the Biden administration banned tech exports. This shifted global supply chains, with countries like India, Malaysia, and Singapore becoming alternatives for tech manufacturing. China's economy faced slow growth, worsened by a weak real estate sector and low consumer spending. Government stimulus provided short-term relief, but consumption remained a key issue.
Extreme weather events disrupted global supply chains, highlighting the need for climate- resilient infrastructure. Geopolitical conflicts, like the Russia-Ukraine war and the Israel-Hamas conflict, added to economic uncertainty.
THE OUTLOOK FOR 2025
Economic Projections: Dun & Bradstreet expects global growth to remain around 2.7 per cent in 2025 as fiscal policies take center stage. The U.S. is likely to implement corporate tax cuts to stimulate job creation and consumer spending, while China is expected to introduce measures targeting private consumption. However, Europe's recovery will be slower, constrained by high energy costs and structural weaknesses in manufacturing sectors.
Risks to Businesses: Supplier risks are set to rise in 2025. Our Global Business Optimism Insights survey indicates increased payment delays and heightened risk perceptions due to elevated borrowing costs and persistent input cost pressures. The expiration of energy subsidies in developed economies will exacerbate these challenges, while logistics costs are expected to remain high. Supplier concentration risk has also grown, as businesses diversify away from Mainland China in favor of localized sourcing strategies.
Sectoral Shifts: The tech sector's bifurcation is likely to deepen, creating opportunities for economies aligning with U.S.-led or China-led ecosystems. Meanwhile, renewable energy and climate-resilient infrastructure are expected to attract significant investment, driven by the economic fallout from extreme weather events.
Navigating the uncertainties of 2025 will require strategic fiscal interventions, enhanced supply chain resilience, and investments in technology and infrastructure. As businesses adapt to a shifting global landscape, understanding these trends will be crucial for leveraging emerging opportunities while mitigating risks.
