Goldman Sachs Research economists expect the second Trump administration to bring higher China and auto tariffs, much lower immigration, some fresh tax cuts, and regulatory easing. If so, they forecast that the US economy will grow 2.5% in 2025, outperforming consensus expectations and other DM economies for the third year in a row. According to the economists, the biggest risk is a large across-the-board tariff, which would likely hit growth hard.
Goldman Sachs Research strategists provide detail on their global markets outlook, highlighting 10 core investment themes.
Our European economists in Goldman Sachs Research expect 2025 to be another challenging year for the Euro area economy. That said, they see several reasons for continued growth, rather than a Euro area recession. Growth momentum remains modestly positive; consumption is likely to recover given rising real incomes and elevated savings; and they expect the South to show continued resilience compared with the North.
The recent UK macroeconomic news points to more near-term growth and inflation, according to our European economists in Goldman Sachs Research. They continue to think that the BoE will ultimately cut further than the current market pricing of 4% for the terminal rate. Overall, they expect annual GDP growth of 1.2% in 2025, three-tenths below the BoE’s latest forecasts.
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