Goldman Sachs Research is projecting a robust year of global economic growth in 2025.
Economists at the prominent U.S. firm expect the U.S. economy to exceed forecasts, while the euro area is anticipated to lag behind due to potential new tariffs from the Trump administration.
The global Gross Domestic Product (GDP) is expected to grow by 2.7% on an annual average basis in 2025, slightly above the consensus forecast from economists surveyed by Bloomberg and consistent with the estimated growth for 2024.
In the U.S., GDP growth is projected at 2.5%, significantly outpacing the consensus estimate of 1.9%. Meanwhile, the euro area is forecasted to expand by just 0.8%, below the consensus of 1.2%.
China’s economy is expected to grow by 4.0%, while India is projected to see a growth rate of 6.7%.
Goldman Sachs Research Chief Economist Jan Hatzius noted in the report titled “Macro Outlook 2025: Tailwinds (Probably) Trump Tariffs” that “global labor markets have rebalanced.” He also mentioned that inflation has been trending downward, coming within reach of central bank targets, and that many central banks are in the process of reducing interest rates to more normal levels.
As the world’s largest economy, the U.S. is anticipated to grow faster than other developed markets for the third consecutive year. Hatzius suggested that the re-election of President Donald Trump could lead to increased tariffs on China and imported cars, reduced immigration, new tax cuts, and regulatory easing.
However, he cautioned that “the biggest risk is a large across-the-board tariff, which would likely hit growth hard.”
