Analysts at Capital Economics are optimistic about the global economy in the year ahead, predicting "reasonably healthy growth" in global GDP. Even a modest increase would be a positive sign, they note.

In 2025, central banks around the world will continue the process of normalizing monetary policies. A significant and challenging issue for the global economy will be the potential impact of tariffs promised by US President-elect Donald Trump. Currency strategists at Capital Economics believe that the impact will be limited, with significant effects from the tariffs likely to emerge in 2026 rather than 2025.

Geopolitical issues are expected to take center stage next year, though their economic consequences will likely play out over several years.

The US economy is expected to be somewhat unstable in 2025. Capital Economics forecasts that the Trump administration's policies could limit GDP growth to 1.5% year-on-year. This, in turn, could lead to a temporary inflation spike of up to 3%.

Capital Economics also predicts that the Federal Reserve will cut interest rates twice in the first half of 2025, with the target range for the federal funds rate set between 3.75% and 4.00%.

The eurozone is forecast to experience sluggish economic growth and inflation below the 2% target. This will likely prompt the European Central Bank to lower interest rates further.

As for the UK economy, analysts at Capital Economics expect a modest recovery, despite domestic challenges and gloomy prospects.

Regarding Asian countries, China is set to ease its monetary policy further to stimulate economic activity. However, in 2025, China will face a slowdown due to a more challenging external environment and continued declines in property prices, experts emphasize.

India's economy is expected to enter a "softer phase" in 2025 after recent strong performance, with the Reserve Bank of India adopting a less restrictive monetary policy stance. Other Asian regions are anticipated to maintain weak GDP growth and low inflation.

Capital Economics also forecasts a decline in most energy and industrial metals prices in 2025, weighed down by "structural demand constraints" and rising supply.