The global economy faces a 2025 marked by slowdown, geopolitical tensions, and US elections

The webinar «Turbulence and resilience in international trade«, organized by Coface, presented a complex and challenging outlook for the global economy in 2025. The event was attended by Bruno de Moura, Head of Macroeconomics at Coface, and Dr. Ruth Ferrero, professor of Political Science at the Complutense University of Madrid, who addressed the economic challenges in Europe, the United States and China, as well as the geopolitical implications and the impact of the upcoming US elections.

Slowdown and moderation in prices and monetary policies

Bruno de Moura emphasized that the global economy is at a crucial juncture, with some signs of relief in commodity prices and a relaxation of monetary policies. “The current situation is quite unfavorable for producers and for prices,” commented de Moura, referring to weak demand in the United States and China. Oil prices are expected to hover around $70-75 per barrel, with one significant threat: a potential conflict between Israel and Iran that could disrupt trade. Strait of Hormuz, through which 30% of the world's oil trade passes.

De Moura expects interest rates in Europe and the United States to fall by the end of 2025, to 2,5% and 3% respectively. However, he stressed that the European economy is fragile, especially in countries such as Germany, whose industry has been affected by high energy costs and its dependence on the Chinese market. “The only hope for the euro zone is consumption, although citizens are opting for savings,” he added.

Donald Trump or Kamala Harris are two very different ways of doing politics, whose measures will have a great international impact, especially with regard to the economy.

China and its internal challenges

China is experiencing a slowdown marked by the Real estate crisis and low domestic demand, which complicates economic recovery. “The situation is one of slowdown, very complicated,” said de Moura, highlighting the fall in the value of real estate assets and the resulting decrease in citizens’ savings.

US Elections: Impact on Economy and Democracy

Dr. Ruth Ferrero highlighted that the presidential elections in the United States will have a limited impact on foreign policy, although both candidates will favor the disconnection with Europe“Trump will go faster and Harris will go slower,” he said. However, he warned that the risk to democracy in the US is greater if Donald Trump is re-elected. De Moura, for his part, predicted an increase in spending and protectionism under both candidates, although to different degrees, and noted that a Trump victory could generate a greater risk of inflation.

Europe and its geopolitical role

At the geopolitical level, Ferrero noted that the European Union faces a loss of global relevance. “The European Union is being relegated to a very secondary role,” he said, adding that recent reports suggest reindustrialisation to improve the continent’s competitiveness. As for Spain, Ferrero highlighted its attractiveness as an investment destination, pointing out its position as the advanced economy with the highest projected growth for the year.