Global economic growth in 2025 is expected to be marked by rebalanced labor markets and easing inflation, according to Goldman Sachs Research.
Chief Economist at Goldman Sachs, Jan Hatzius, highlighted in the report Macro Outlook 2025: Tailwinds (Probably) Trump Tariffs that “global labor markets have rebalanced.”
He further noted, “Inflation has continued to trend down and is now within striking distance of central bank targets. And most central banks are well into the process of cutting interest rates back to more normal levels.”
The global economy is projected to grow by 2.7% in 2025, matching the estimated rate for 2024 and slightly exceeding the consensus forecast from Bloomberg. The United States is expected to lead developed markets with a GDP growth of 2.5%, significantly higher than the consensus of 1.9%.
In contrast, the euro area’s economy is predicted to expand by only 0.8%, falling short of the 1.2% consensus projection, as it grapples with anticipated tariffs from the Trump administration.
China and India, two of the world’s fastest-growing economies, are forecasted to record GDP growth rates of 4.0% and 6.7%, respectively, maintaining their strong performance in the global landscape.
The report also highlights potential policy shifts under the re-election of US President Donald Trump, including “higher tariffs on China and on imported cars, much lower immigration, some fresh tax cuts, and regulatory easing.” Hatzius cautioned about the risks associated with such measures, stating, “The biggest risk is a large across-the-board tariff, which would likely hit growth hard.”
Despite these challenges, Goldman Sachs anticipates a solid year of economic progress, supported by a steady recovery in global labor markets and central bank efforts to stabilize inflation.