ArmInfo. Although the US presidential elections are already behind us, it is still impossible to make reasonable assumptions about the developments in the global economy, since there is an element of uncertainty regarding the practical steps of the 47th President of the United States, Donald Trump. This was stated by the head of macropolitics research at the Amundi Investment Institute Didier Borowski at the Amundi. Investment Forecast 2025 conference in Yerevan, presenting the global themes of the current year and key bright spots that can help investors overcome the existing problems.
Trump and the global economy
According to Didier Borovsky, 2024 was characterized by uncertainty due to the upcoming presidential elections in a number of countries. Having left the US elections behind, in 2025 we continue to live in conditions of uncertainty, but this time related to economic policy. "We know who the US president is, but we do not know what steps he will take in practice," he adds.
At the end of 2024, the US recorded GDP growth of 3%, which, according to him, positively surprised experts, since a year and a half ago many expected a recession in the American economy.
According to Borowsky, the US economy will not "go off the rails" during the presidency of President Trump, but over the next 12-18 months, GDP growth may slow down and approach its potential. "We believe that the current growth rates in the US cannot be sustainable, since potential growth is close to 2%. We expect the US business cycle to return to this level in the next 12 months. Growth of 1.9% is expected this year," he notes.
Meanwhile, economic development in the countries of the united Europe, where growth was talked about a year ago, is disappointing. In particular, Germany, which, by the way, is the largest economy in the EU, has been in recession for the second year in a row. The parliamentary elections expected at the end of February and certain conceptual changes, revision of fiscal policy may become a turning point for this country. <Potential growth in Europe is much lower than in the US, but not as low as in the last 2 years. We believe that if real wages grow, the state of domestic economies should improve to some extent. By the end of this year, we expect weak growth rates in the region of 0.7%," the expert notes, adding that the growth potential in the EU is about 1%.
The Institute's analysts estimate India's potential GDP growth in the coming years at approximately 6%, while in China the figure is declining and approaching 3%.
"Thus, the global economy's growth will be 3%, which is not a very high figure - it is inferior to the figures of the last 20 years", - the expert notes. At the same time, he emphasized, it is necessary to realize that the global economy has proven its sustainability in recent years. Accordingly, for the current year, "Amundi" predicts global growth of 3% with a 6% potential.
How will inflation manifest itself?
All of Donald Trump's actions may at some point lead to inflation in the US. For example, the deportation of immigrants he promised may affect the labor market, lead to wage growth, and therefore to inflation in the consumer market. <Consumers will have to endure higher prices if he fulfills what he promised during the election campaign>, he adds.
At the same time, the actions of the US president are unlikely to lead to inflation in the EU, so there is no need to revise the policy in the eurozone at the moment. <We believe that this year the European Central Bank will continue its policy of lowering interest rates>, says Didier Borowski.
Thus, despite the still existing inflationary pressure, the picture at the global level indicates that it has already reached its peak and is now moving down. According to the expert's forecast, in the near future it will be possible to keep inflation within 2-3%. <However, in the new world, inflation fluctuations will be higher, which will complicate the work of central banks>, - he notes.
Reaction of central banks
<At the moment, the US Federal Reserve is still in the "wait and see" mode, as are we, - Borovsky notes. According to him, this is the most rational decision from the point of view of the central bank. In any case, according to the representative of "Amundi", one should not expect a sharp reduction in interest rates from central banks, as was the case before, in the 2010s. <The world will not return to the era of low interest rates>, - he adds.
<Tariff Realities>
According to Borowski, Trump's second term will not be marked by radical changes; he will act more cautiously. As for tariff policy, no radical shifts are expected either - the process will be gradual and will not apply to all countries, since the White House is aware that this could be a shock to the US economy.
Thus, the authorities of China, which has the second-largest economy in the world by nominal GDP, are expected to announce fiscal stimulus only by the end of the first quarter. <They are also in the "wait and see" mode, because they do not know exactly what decision Trump will make regarding tariffs - the fiscal stimulus in China will depend on the shock, the consequences of which they will have to overcome. One thing is clear: they will act in such a way as to avoid a strong economic shock as a result of tariff policy, in connection with which, in the case of China, a gradual slowdown in economic growth is predicted>, - he notes.
Growing public debt as an indicator
The expert reminds that the main source of growth in the US economy is public debt. <The US economy is in uncharted territory - for the first time in its history, an economy operating at full employment has a large deficit. Usually, when you are at full employment, your deficit starts to decline and your debt is under control. They are not using this opportunity - strong economic growth - to adjust their fiscal situation. In practice, this means that in the coming years the US economy will face a recession, which will inevitably lead to an increase in the deficit>, - he notes.
<Fiscal space has narrowed everywhere, almost all countries are recording an increase in public debt, and in this case, their ability to overcome shocks is further reduced. This can lead to macro volatility, an increase in the price of debt securities>, - says Didier Borowski.
The Future of the Dollar
According to the representative of <Amundi>, although the US dollar continues to be a <safe haven> for many people, experts do not think that it will maintain its position throughout the year. <We expect that at some point the dollar will devalue>, - he notes.
<Pessimism> has no place here
An interesting development is taking place in the capital markets, which is affecting the indicators, the expert notes. According to Borovsky, the <miraculous seven> is no longer the driving force - the US capital market sector now provides opportunities for investors. Taxes are lower here, which will benefit all companies, including small and medium ones. Accordingly, the S&P 500 indicators are now much higher than last year.
<We should not be too pessimistic about Europe>, - the expert urges. Yes, there are structural weaknesses, yes, productivity, domestic consumption and investment are low, and although the figures show that growth will be very weak at the beginning of the year, the eurozone has huge opportunities that can be mobilized.
<In the coming months, fiscal clarity will increase in the eurozone, and at some point - in mid-2026, there will be a cyclical recovery and a return to potential growth levels. In any case, here and everywhere <pessimism> is not the best assistant, the right hedging will be more effective>, - concludes Didier Borowski, head of macro policy research at the Amundi Investment Institute.
