The latest economic outlook from Goldman Sachs projects global GDP growth of 2.7% in 2025, with the United States leading developed markets in terms of performance.
Indeed, US gross domestic product (GDP) is expected to grow by 2.5 percent in 2025, well above the consensus of 1.9 percent, while the eurozone economy is expected to grow by just 0. .8 percent.
According to the wealth management company, the US expansion will be fueled by expected tax cuts, regulatory reforms and a sharp acceleration in labor productivity. Goldman Sachs noted that the United States has already shown a stronger-than-expected growth trajectory, which is expected to continue for the third consecutive year.
Although trade tensions, particularly with China, present risks, the company said the overall economic impact should be contained.
Goldman Sachs projects that any tariffs would have a small impact on U.S. GDP, potentially reducing growth by 0.2 percent next year. In fact, he noted that while the United States may still face inflationary pressures from higher tariffs, the overall outlook remains optimistic due to falling inflation rates and easing financial conditions.
“The biggest risk is a broad and large tariff, which would likely hit growth hard,” said Jan Hatzius, head of global investment research and chief economist at Goldman Sachs.
“Assuming the trade war does not escalate further, we expect positive impulses from tax cuts, a more favorable regulatory environment and better ‘animal spirits’ among businesses to dominate in 2026,” added Hatzius.
The economist expects the effects of these trade policies to be more pronounced in other economies, notably in the euro zone and China.
Indeed, Goldman Sachs has already revised its growth forecasts for the Eurozone downward, citing the knock-on effects of trade policy uncertainty and tariffs, which could reduce its GDP by almost 1 percent if trade policy uncertainties reached the highest levels of trade conflict seen in 2017. 2018-19.
“Our economists have reduced their growth forecasts for the Eurozone in 2025 by 0.5 percentage points following the results of the US elections. [fourth quarter over fourth quarter] and would likely reduce it further if the United States imposed across-the-board tariffs,” the wealth management firm said.
China, the world’s second-largest economy, is also expected to grow slower, at 4.5 percent, as it grapples with the impact of rising tariffs on exports.
Likewise, according to Goldman Sachs Research, other countries are also expected to be shaken by US trade policy, with greater curbs expected in the most trade-exposed economies.
However, Hatzius said: “Barring a broader trade war, the policy changes made by the second Trump administration are unlikely to alter the broad outlines of our global economic views. »
Additionally, the wealth management firm noted that the global outlook is supported by a dramatic decline in inflation over the past two years, supporting real income growth and easing pressure on central banks to maintain high interest rates.
With inflation slowing, Goldman Sachs Research expects the US Federal Reserve to cut its key rate to between 3.25 and 3.5 percent, with sequential reductions during the first quarter and a slowdown through following.
The European Central Bank, meanwhile, is expected to lower its key rate to a final rate of 1.75 percent.
“Our economists believe there is also significant room for policy easing in emerging markets,” the report said.
