Introduction to global economic dynamics
In the current environment, the global economy has shown signs of resilience, avoiding recession for the second consecutive year. However, the economic landscape is characterized by significant challenges, including increased geopolitical risk and an eventful electoral calendar. The main central banks, in an attempt to stimulate growth, have started a cycle of interest rate cuts, while inflation has started to slow down. This article will explore the economic outlook for 2025, analyzing the key factors that will influence the
global market.
The role of Trump’s economic policy
One of the central themes for 2025 will be the implementation of Trump’s economic policies, commonly known as Trumponomics. These policies include deregulation, tax cuts, and protectionist measures. However, the crucial question will be whether the president will fully follow these strategies, especially in a context of growing public dissatisfaction with inflation. The 2024 midterm elections could influence political decisions, making a less aggressive approach prudent to avoid further inflationary shocks
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Inflation and economic growth: a delicate balance
Despite the slowdown in inflation, upside risks remain significant, particularly in the United States. Robust growth could fuel inflationary pressures, further complicating efforts to reach the 2% target. Trump’s fiscal and trade policies, if implemented, could aggravate this situation. On the other hand, in the euro area, the situation is more complex, with a risk of bilateral inflation offering opportunities for the European Central Bank to adopt more flexible measures
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Productivity and competitiveness: the transatlantic divide
The productivity gap between Europe and the United States continues to widen, with Europe struggling to catch up. While the United States shows signs of post-pandemic recovery, the euro area faces structural challenges that hinder growth. Europe’s ability to innovate and adapt to new technologies, such as artificial intelligence, will be crucial for its economic future. A recovery in productivity is possible, but it will require targeted policies and greater economic integration
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Debt sustainability and financial stability
The sustainability of sovereign debt represents another significant challenge for 2025. With the increase in public debt and the Quantitative Tightening policies, government bonds have become cheaper, but financial stability remains at risk. The political situation in Europe, especially in France and Germany, could influence fiscal and monetary decisions. It is essential to monitor how these factors will interact to ensure sustainable growth and long-term economic stability
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