Singular Bank advises caution and a strategic approach in the face of global growth marked by geopolitical uncertainty.

 

Singular Bank has made public its recent report, "Economic Outlook and Investment Strategy 2025: Implications of a New Geoeconomic Cycle", a comprehensive analysis of the international economic and geopolitical scenario and its implications for asset allocation. The report highlights a context of increasing fragmentation, geopolitical uncertainty and profound structural transformations.

 

The bank identifies a systemic change in the international economic order, which has been structured since 2022 around the “5Ds”: the deglobalization, characterized by a rise in protectionism and the redesign of value chains; decarbonization, pillar of the energy transition; the digitalization, powered by artificial intelligence and automation; demography, whose regional divergences alter consumption and productivity patterns; and the disconfiguration of the world order, reflecting the weakening of multilateralism and the decline of US influence. These vectors, taken together, outline a new geoeconomic cycle with greater volatility and a strategic repositioning of the main global players.

 

In this complex scenario, The United States is at a crucial momentThe re-election of President Donald Trump and the implementation of his nationalist agenda under the slogan “Make America Great Again"have driven a shift towards economic and political isolationism, weakening its traditional role. The tariff policies and doubts about its fiscal consolidation plan could generate inflationary pressures and a significant increase in the budget deficit. As a result, the US economy is expected to moderate its growth to a 1,5% in 2025, its lowest rate since 2011, excluding the impact of the pandemic.

 

 

Singular Bank anticipates a slowdown in the pace of growth to 1,5% in the US in
2025, as China maintains its technological commitment despite its internal crisis

 

 

Meanwhile China continues to strengthen its strategic autonomy, reorienting its exports towards Pacific Asia and accelerating its commitment to key technologies, despite weak domestic demand and the persistent real estate crisis. Its GDP in 2025 is expected to stabilize around 4,3% per yearAt the same time, India is emerging as a strategic partner on the global stage, consolidating its position as a hub for industrial relocation due to its competitive advantages in both traditional and high-tech sectors.

 

Europe, on the other hand, faces the challenge of strengthening its strategic autonomy and respond in a coordinated manner to the new world order. Despite internal political divisions, there are signs of greater integration thanks to the reactivation of the Paris-Berlin axis, the recovery of ties with the United Kingdom, and the boost to sectors such as defense, biotechnology, and artificial intelligence. In this context, the Eurozone is expected to maintain moderate economic growth. 0,9 %, with Spain recording a 2,5% per year, although signs of economic cooling are anticipated for 2026. Singular Bank also warns that new US tariffs on the EU would particularly affect Germany, France and Italy.

 

In the Spanish sphere, the report highlights the resilience of its economy, supported by domestic consumption, employment and population growth. However, it warns of persistent challenges such as low productivity, the legal uncertainty, the increase in labor costs and the absence of structural reforms. Furthermore, a deterioration in consumer confidence has been detected, which could lead to a slowdown in private spending in the coming quarters.

 

Investment Strategy: Focus on Predictable Returns

 

Singular Bank's investment strategy is based on the premise that US tariffs will slow growth but not cause a global recession. Furthermore, while they will raise inflation in the US, Federal Reserve (Fed) The US will cautiously lower its policy rate over the next 12 months to around 3,50%. Under these conditions, corporate profits will continue to grow solidly, driven by the technology, healthcare, and financial sectors, keeping corporate debt default rates low.

 

Multiples in the US have little room for further expansion, while in Europe and Asia-Pacific the margin is slightly higher. Therefore, the upside potential for stock markets will depend largely on earnings performance. The firm expects continued dispersion in the performance of different sectors and markets.

 

In this sense, the equity strategy focuses on investing in the structural growth of megatrends, accelerated by technological disruptions and geopolitical tensions. However, large US technology companies are already discounting exponential growth, and their valuations are more demanding than those of Asia-Pacific or other sectors benefiting from AI, such as healthcare and industry. The entity maintains its conviction in infrastructure businesses, given the enormous investments required by the private sector in the coming decades. By market, expected returns are higher in Europe (with preference for Spain and the United Kingdom) and Pacific Asia (including Japan) than in the US.

 

In fixed income, long-term debt term premiums are expected to remain elevated, but yield curves are expected to ease moderately as the Federal Reserve resumes its expansionary monetary policy. Faced with the diminishing returns on monetary assets, the best alternative lies in the corporate credit in intermediate terms, including subordinated issues from financial institutions and bank loans with collateral.

 

In this context, the US dollar (USD) could temporarily recover due to higher interest rates, before resuming its downward trend in the medium term. Gold, for its part, is at risk of correcting if speculative positions moderate.

 

Alicia Coronil Jónsson, Chief Economist at Singular BankHe emphasized: “The current geoeconomic scenario is marked by increasing global fragmentation, driven by the resurgence of economic nationalism and the clash between the US and China over control of technology, critical raw materials, and global governance. Hence, the uncertainty is the new normal in which households and businesses will have to make decisions, in a context in which the evolution of current geopolitical tensions and risks will determine the future dynamism of the global economy."

 

For its part, Roberto Scholtes, Head of Strategy at Singular Bank, added: “The strong rebound in stock markets has once again diminished the upside potential as valuations are once again challenging, particularly in the US. Returns will largely depend on the still robust growth in corporate earnings, and we expect them to be somewhat stronger in Europe and Asia-Pacific, and in lagging sectors such as Healthcare and Infrastructure. We maintain a strategy relatively cautious given the attractive risk-return ratio of quality corporate credit.”