Global economic outlook, January 2025 : Deloitte
LONDON : The year 2024 began with confidence that inflation was largely beaten and that major economies would likely avoid recession.1 Those expectations were correct. However, as the year ended, it became increasingly clear that inflation remained more persistent than anticipated. And while the United States experienced strong growth, most other advanced economies did not. Moreover, as the year ended, many economies experienced currency depreciation, which could potentially become disruptive especially for emerging market economies.
As 2025 begins, there is some uncertainty due to the likely shift in policy following numerous elections around the world. New policies could lead to new trajectories for inflation, borrowing costs, and currency values, as well as trade flows, capital flows, and costs of production. Meanwhile, governments and central banks continue to navigate a balance between a desire to suppress inflation and a goal to boost growth.
In the following sections, economists from Deloitte’s member firms offer their views on their respective countries’ outlooks for the coming year. Our hope is that readers will find these outlooks interesting, insightful, and helpful. Your feedback is most welcome, and our economists are available for more in-depth discussions on these issues.
United States
– Michael Wolf
The US economy continues to outperform its developed economy peers. Real gross domestic product growth for 2024 is expected to reach 2.8%. Despite elevated interest rates, consumer spending has grown strongly. A relatively tight labor market, stronger inflation-adjusted wage growth, and a sharp increase in immigration have supported aggregate consumer spending. Business investment has also held up relatively well, largely due to industrial policies that caused a sharp increase in factory construction.
A strong economy, coupled with a large federal deficit, has supported government spending. On the downside, high mortgage rates have limited investment in housing, while a strong dollar has restrained exports and encouraged imports.
The Federal Reserve’s preferred measure of inflation, the personal consumption expenditures (PCE) price index, had come down to 2.3% in October 2024 on a year-ago basis, from 2.8% in March 2024. As a result, the Fed was able to cut the federal funds rate by 100 basis points between September and December 2024. Although additional rate cuts are anticipated for 2025, the pace of those cuts is expected to be modest, due in part to the persistence of services inflation. The mix of federal fiscal policy could also affect the pace of future rate cuts.
Indeed, federal economic policy is the largest uncertainty in the US economic outlook.2 In our baseline scenario, we assume that many of the policies proposed3 during the presidential campaign will not be implemented in their most maximalist forms. For example, we expect only a gradual increase in tariffs on select trading partners and a modest rise in deportations of undocumented immigrants. In addition, we expect the Fed to maintain its independence and for the provisions of the Tax Cuts and Jobs Act (TCJA) to be extended.
This combination of policies should allow real GDP to grow by 2.4% in 2025 before slowing to 1.7% in 2026. The negative economic effects of tariffs, such as higher inflation and weaker real GDP growth, are not expected to be fully felt until 2026 as per our baseline scenario. In the meantime, rising tariffs will encourage frontloading of imports and consumer spending. On the positive side, this is expected to boost consumer spending temporarily and raise business inventories. On the downside, it is expected to cause imports to grow faster than exports, thereby creating a drag on GDP from the external sector.
Similarly, deportations are expected to be relatively modest in our baseline scenario. The negative effects, which include weaker domestic demand and a slower-growing workforce, are expected to arrive late in 2025, with the fuller effects being felt in 2026 and later. The loss of available labor will be most acutely felt in industries such as agriculture, construction, and hospitality, which rely more heavily on undocumented workers.4 For example, the US Department of Agriculture estimates that 41% of crop farmworkers are undocumented.5
The positive effects of extending the TCJA and implementing deregulation are also expected to be felt closer to 2026. The extension of the TCJA will need to go through usual legislative processes, meaning that a deal is unlikely in the first half of the year. Businesses are likely to hold off on large investments until there is greater clarity on the outcome of the tax bill. Deregulation will likely boost business investment as well, but it will take time for such measures to be implemented and for businesses to react to them.
It is important to note that our baseline scenario is highly unlikely to materialize exactly as we have outlined here. Understanding the uncertainty surrounding federal policy, we have created alternative scenarios where the economy could perform better or worse depending on the mix of those policies.
For example, our upside scenario involves greater cuts to taxes, lower tariffs, more deregulation, and fewer deportations than our baseline allows. Under this scenario, real GDP is expected to grow by 2.7% in 2025 and then accelerate above 3% in the following two years.
Our downside scenario assumes the full range of promised tariffs (60% on all goods from China and 20% on goods from all other trading partners), far more deportations, and much larger cuts to government spending. This scenario would cause real GDP to grow by just 1.6% in 2025 and contract by 2.1% in 2026.
Aside from the uncertain policy environment, the US economic outlook remains bright. The economy is gradually slowing toward its potential rate of growth. Unemployment remains low, and inflation is nearing 2%. As a result, the Fed is expected to ease monetary policy at a modest pace, which should prevent a more protracted slowdown in the near term.
Canada
– Dawn Desjardins
Canada’s economy faces a myriad of challenges in the year ahead: A slowing in population growth and uncertainty about domestic and US policy top the list. And while these challenges present downside risks to the outlook, the combination of stable inflation, lower interest rates, and high household savings will function as important offsets.
We remain relatively positive on the outlook for Canada’s economy in 2025 and forecast stronger GDP gains than the modest increases of 2023 and 2024. This is far from a riskless call, however, with US government tariffs on Canadian exports likely to have a significant adverse effect on Canada’s economy in the year ahead.
There are positives …
As stated, we see the economy growing at a stronger pace in 2025, supported by the Bank of Canada shifting monetary policy from a neutral to a mildly stimulative stance by the middle of the year. Inflation is also a plus for the outlook, with the headline rate projected to hold close to the 2% target next year. These are significantly better conditions for consumers, with spending also getting a lift from a consumption tax holiday early in the year. A stable labor market and high household savings balance should moderate the impact of another tranche of mortgage renewals. Conversely, slower population growth will weigh on spending as the year progresses.
The housing market is expected to get a lift in 2025, as interest rate–sensitive buyers return to the market. This was already evident in the final quarter of 2024, and we expect activity will continue to gain steam. Supply will continue to limit the improvement in affordability, although lower interest rates are expected to underpin a recovery in construction activity.
… and uncertainties
The big wildcard moment for 2025 will be the recovery of business confidence. Uncertainty about how the newly elected US administration will proceed on tax, regulation and trade policy may keep companies sidelined in 2025. We anticipate a slight strengthening of exports as the weaker Canadian dollar makes Canadian goods and services more attractive to US buyers. This forecast also faces a high level of uncertainty, given the potential for tariffs on US imports from Canada and Mexico, which are not included in our baseline scenario.
To be sure, 2025 will bring significant challenges for Canada. Policies to address the country’s poor productivity performance are needed, and the proroguing of the federal government will delay the implementation of any policies to incentivize businesses to invest. Further, pressures to satisfy demands for increased spending on defense and security will remain high on the government’s priority list. And, if tariffs do materialize, governments will have to lean in to support businesses and consumers, leaving limited resources to implement productivity-enhancing measures.
Mexico
– Daniel Zaga and Marcos Daniel Arias
The Mexican economy will likely close 2024 with a growth rate of 1.6%, a notable decrease compared to the progress made in previous years (3.5% in 2023 and 3.1% in 2022). This slowdown occurs in a context of broad uncertainty due to the presidential transitions in both Mexico and the United States, something that has hindered investment, which at the end of the third quarter registered a year-on-year decline of 2.3%, compared to growth of 23.7% in the same period of 2023.
At the same time, the government has reduced spending on infrastructure projects, which is reflected in the weakening of sectors such as construction, which fell by 2.3% till September 2024.
For 2025, we expect this trend to continue, as government will need to maintain strict fiscal discipline, while political uncertainty will likely be high during the first months of the year. We expect real GDP to grow by 1% in 2025, thanks to resilience in consumption—which will remain strong due to increases in minimum wage (12% growth expected in 2025). We expect risks to be relatively balanced. The possibility of US tariffs presents a downside to the outlook, but at the same time, it is also possible that the relocation of companies to the country6 will support investment figures toward the end of the year.
The conditions are set for inflation to remain high, but not outside the central bank’s target of 3.0% (+/–1%). Our forecast for 2025 is 3.8%, which would allow interest rates to fall at a steady but moderate pace. The reference rate is expected to end 2024 at 10.0%, close to its maximum level in 20 years, but we expect downward adjustments in 2025, which would leave it at 7.5% by the end of the year.
In this scenario, we expect the exchange rate to trade around 20 pesos per US dollar during the year, although we do not rule out episodes of volatility related to the constitutional changes that are being implemented in the country, as well as possible changes in its relationship with the United States.
The challenges to fiscal consolidation
Mexico will close the current year with a historic fiscal deficit of 6% of GDP, which has drawn the attention of the market and influenced the decision of Fitch and Moody’s to change the outlook of the country’s sovereign debt from stable to negative. Although Mexico’s debt level is not critical (51.4% of GDP), the current trend of public finances favors its growth, and the government has been forced to present an ambitious fiscal consolidation plan for the coming months. If followed, it is estimated that the deficit would fall to 3.9% of GDP in 2025, thanks to a 1.9% drop in public spending.7 Although well-intentioned, there are several elements that could get in the way, such as lower economic growth and the decline in oil production—both relevant to public revenues—making this issue top-of-mind for government agenda.
Finally, 2025 will be marked by the first national judicial election, which is scheduled for June 1, 2025, and will significantly transform the justice system.8
In tandem, Mexico will invest great efforts in managing its relationship with the United States—the destination of more than 80% of the former’s exports. The possibility of tariffs has been revived, and if they materialize in their maximalist form, it will profoundly change the balance between these economies.
Colombia
– Daniel Zaga and Nicolás Barone
Colombia’s economy had a relatively weak 2023, growing only 0.6% compared to 2022. Declines in value added were observed in key sectors such as construction (4.1%), manufacturing (3.6%), and retail (2.8%).
However, over the first three quarters of 2024, the economy grew by 1.6% in cumulative terms. This is undoubtedly encouraging, representing significant improvement compared to last year. The sector experiencing the highest growth was entertainment (9.8%), likely due to sporting events occurring in June and July 2024. The agricultural sector ranked second (8.9%), followed by public administration (4.2%).
Key macroeconomic indicators, such as inflation and unemployment, have also shown improvement. Inflation levels dropped from 8.3% in January to 5.2% in November, while unemployment fell from 12.6% in January to 9.1% in October.
The state of investment in Colombia
One of the main concerns of the Colombian economy is the lack of investment. At the end of 2023, investment declined by 9.5% compared to 2022.
By the third quarter of 2024, investment grew by 4.0% annually, although it has increased by only 0.64% in cumulative terms. Investments in housing, which constitute approximately 20% of total investment, experienced the poorest performance, declining by 9.1% year over year. On the other hand, investments in machinery and equipment, which contribute nearly 40% of the total, showed an annual growth of 5.9%. Lastly, other buildings and structures, which account for 30% of the total investment, grew by 12.8%.
According to Deloitte’s investment diagnostic report, the other buildings and structures subsector is the one that influences short-term GDP the most—a phenomenon consistent with the greater dynamism that the economy experienced in the second and third quarters of 2024. Meanwhile, the machinery and equipment sector has the biggest effect on long-term GDP.
Government’s economic reforms
In 2024, the government has proposed several reforms. One of them is the health care system reform, which failed to get approved in Congress. The pension reform was accepted on July 16; its main adjustment involves greater public sector participation in the administration of the funds contributed by workers. This implies an increase in transfers from government toward long-term financing of the pension system, as it takes on the responsibility for all pensions below 2.3 times the current legal minimum wage.9
In addition to that, on Dec. 2, 2024, the reform to the General Participation System was approved. With this reform, transfers of government’s current revenues to the regions would increase. Currently, government transfers about 27% of current revenues, and with the new adjustment, this would gradually increase to 39.5% of revenues by 2035.
Both reforms imply fiscal pressures in the medium and long term, so future governments will need to seek additional sources of funding. A labor reform is also pending approval, which, while aimed at improving the current conditions of workers, particularly those working night shifts, holidays, and Sundays, also increases hiring and dismissal costs. This could affect the current trend of declining unemployment.
Finally, to finance the 2025 budget, the government has proposed a new financing law aimed at raising 0.9% of GDP. The primary revenue source under this proposal is taxation on online gambling.10 However, on Dec. 11, 2024, the current proposal was rejected by the Congress. In response, the government announced that it will introduce modifications to enhance tax measures and strengthen evasion controls, with a continued focus on online gambling.
Overall, the Colombian economy still exhibits certain weak links that require attention, despite showing strong signs of recovery and macroeconomic stability in terms of prices and unemployment. Lack of investment remains one of the main factors limiting growth. Although investment grew by 4.0% year over year in the third quarter of 2024, year-to-date investment increased by just 0.64% compared with the same period in 2023. With the changes introduced by the reforms, the government will need to seek new sources of financing to keep the fiscal accounts healthy.
Argentina
– Daniel Zaga and Federico Di Yenno
Starting in December 2023, the current government of Argentina implemented an economic program with key pillars11 focused on:
1. Fiscal consolidation to end the central bank’s monetary financing of the treasury
2. The elimination of remunerated liabilities that the Central Bank held with private banks (previously used by past administrations to sterilize excess money supply), which had become a source of endogenous monetary creation due to interest payments on these instruments
3. An exchange-rate policy involving a substantial devaluation in December 2023 to reduce the gap with the parallel exchange market, followed by a monthly devaluation rate of 2% throughout 2024, aimed to anchor inflation expectations.
In 2024, the fiscal surplus was achieved through substantial real cuts in public works spending, energy and transportation subsidies, pensions, and public sector salaries. As a result, between January and October, a primary surplus of 1.8% of GDP was achieved, and including interest payments, the overall fiscal surplus was 0.5% of GDP. The government stated that this fiscal equilibrium will continue to be pursued in 2025.
As soon as the current government took office, it generated an initial increase in the exchange rate from 366 Argentinian pesos per dollar to 800 (a 54% currency devaluation), aiming to reduce the gap with parallel exchange markets—which at that point exceeded 100%. This caused inflation to accelerate from 12.8% monthly in November 2023 (160.9% annualized) to 25.5% in December (211.4% annualized) and 20.6% in January 2024. This led to a significant decline in real wages, particularly in the public sector and the informal economy, which had more difficulty recovering throughout the year.
The fiscal adjustment, together with the initial exchange rate adjustment, resulted in a sharp 2.2% GDP contraction in the first quarter, compared to the previous quarter, followed by a contraction of 1.7% in the second quarter, in an economy that had already experienced a 1.6% annual contraction in 2023. The most affected sectors were manufacturing (annualized 15.6% decline in the first half), construction (21% decline), which was affected by the halt in public works, and retail trade (12.6% decline). In contrast, the agricultural sector, which recovered from the 2023 drought, showed strong performance.
By mid-second quarter, economic activity appeared to stabilize and began to recover, driven by the recovery in real wages due to gradually decreasing inflation and the growth of private credit in local currency, facilitated by successive interest rate cuts by the nation’s central bank (as commercial banks, instead of placing funds in remunerated instruments at the central bank, began extending more loans to businesses and households). Consequently, economic activity in the third quarter is estimated to have grown by 3.4% compared to the previous quarter.
In addition to reorganizing the Argentinian central bank’s balance sheet on the liability side through the elimination of remunerated liabilities, on the asset side, the country began to accumulate foreign currency reserves thanks to higher exports and a significant decline in imports. Net international reserves improved from negative US$12 billion in November 2023 (indicating the central bank had fewer reserves than it owed in the coming year) to negative US$5 billion in November 2024.
Furthermore, the government implemented a series of microeconomic deregulation reforms across various key sectors of the economy and successfully secured Congressional approval for the Ley Bases, introducing major changes to income and wealth taxes, labor reform, privatization of certain public enterprises, tax amnesty for undeclared assets, and a framework to attract large-scale investments, among other significant reforms.12
Thus, the country risk, which had already been decreasing from 2,500 basis points in mid-November 2023 to 1,600 basis points in July 2024, with the consolidation of the fiscal surplus and the initial results of the program, experienced a very rapid decline starting in August with the tax amnesty for undeclared assets.13 This program allowed taxpayers who had not declared their assets in the country to enter the system without paying fines up to US$100,000 (or higher, as in the case of certain investments). The result was much better than expected: More than US$20 billion entered the system, boosting the recovery of Argentinian bonds, leading to a drop in country risk below 800 basis points, and reducing the parallel exchange rate.
Thus, 2024 ends with an economy experiencing a slow recovery, inflation decelerating to 2.4% monthly in November (166% annualized), the exchange rate gap (between the official and parallel exchange rates) falling to approximately 5% (it was 130% at the end of November 2023), and declining country risk. However, significant restrictions and regulations still need to be removed heading into 2025.
The main uncertainty is around when the foreign exchange restrictions will be lifted, in areas like free access to the official foreign exchange market, the normalization of export and import flows, the ability to operate freely in both the official and parallel markets simultaneously, and the reduction or elimination of export duties and import tariffs in certain sectors. We expect that a significant portion of these restrictions, which hinder the inflow of a larger volume of foreign capital, will be removed by the second half of the year.
We anticipate that the economy will grow by 3.7% in 2025, driven by the recovery of two economic engines, manufacturing and construction, and greater dynamism in the hydrocarbon sector, which achieved record production levels of oil and gas thanks to developments in the Vaca Muerta geological formation, and an energy surplus of US$5.4 billion after many years of deficit.14 Meanwhile, the fiscal surplus, which is a fundamental pillar of the government’s economic program, is expected to remain unchanged in 2025, laying the foundation for inflation to continue decelerating throughout the year to an annual rate of 32%.
Another key factor for 2025 will be the performance of the Incentive Regime for Large Investments, the program that offers fiscal, customs, and foreign exchange incentives for 30 years to attract projects exceeding US$200 million. So far, multiple investments in lithium, copper, gold, solar energy, oil, and natural gas have been incorporated into the regime, and it is expected that new projects will continue to be added throughout the year to better utilize the country’s potential in these areas.
Euro área
– Pauliina Sandqvist
The year 2024: Slight expansion, but with divergent growth patterns
Over the past few years, the euro area has seen lower economic growth than many other Western geographies. The year 2024 was another year of sluggish growth in the eurozone (around 0.8%,15 after 0.4%16 in 2023). Yet, considering monetary policy tightening and geopolitical uncertainties, an expansion can be seen as a sign of economic resilience.
Here, sectoral divergencies also become evident in the analysis. Higher interest rates as well as elevated economic uncertainty have affected capital-intensive industries to a large extent, especially because investments in machinery and equipment and construction have fallen.17 The services sector, on the other hand, being more labor- than capital-dependent has expanded moderately. Therefore, countries with higher manufacturing shares tend to have struggled more, especially Germany, Austria, and Finland, whereas more service-orientated economies, like Spain, have seen higher growth.
The recovery of private consumption in 2024 was less dynamic and started later than expected. This is because saving intentions have been elevated, and the savings rate has continuously increased—that is, consumption growth was lower than income growth. In the second quarter of 2024, the eurozone’s savings rate stood at 15.7%,18 which is considerably higher than the pre-pandemic level of approximately 12.5%. Even though consumer confidence recovered,19 elevated uncertainty and higher interest have driven savings intentions.
Unsurprisingly, investment contracted in 2024, whereas government consumption—in things like inflation-mitigating measures and greater defense spending—supported economic activity. Net exports also contributed to GDP growth positively.
Gradual consumption-led recovery to continue
With ongoing interest rate cuts amid elevated economic uncertainties, what can we expect from the year 2025 for the euro area? The answer is continued recovery driven by private spending. Recovering purchasing power, high savings, lower inflation, and robust labor markets will drive consumer expenditure. However, this also requires consumer intentions to shift from saving toward spending.
Overall, the interplay of monetary and fiscal policy will be relevant in 2025. On the one hand, a less restrictive monetary policy is likely to strengthen economic activity through lower incentives to save and easing financing conditions for investments. On the other hand, fiscal impulse tends to be minor, as most euro area economies veer toward consolidating their public finances and withdraw supportive measures to mitigate the effects of high inflation. Thus, government consumption is expected to contribute less to GDP growth.
Nevertheless, funds from the Next Generation EU program are set to support investment activity, in addition to lower interest rates. Yet, the expected effects will likely vary considerably across countries, depending on each country’s share of the funds.
Furthermore, foreign demand is likely to support economic activity, yet only marginally. In many non-EU geographies, the growth rates are projected to moderate (they have been expanding more dynamically than in Europe or in the eurozone in the past two years), but within Europe, the pace of growth is expected to pick up, especially with regard to intra-EU trade. Thus, exports are expected to increase, but imports are likely to increase as well, leaving net exports with a neutral contribution to GDP growth.
Overall, inflation is expected to soften slightly next year, from the 2.4% recorded in 2024 to 2.1%20 in 2025, as high services inflation levels are set to moderate amid weakening wage growth. Some variation in the pathway is expected due to the base effects in the energy sector.
Altogether, the euro area’s real GDP growth is set to slightly increase from 0.8% in 2024 to 1.2%21 in 2025. These numbers are surrounded by relatively high uncertainty, especially considering the softening of households’ saving incentives as well as trade developments amid elevated geopolitical issues.
Italy
– Marco Vulpiani and Claudio Rossetti
The Italian economy continued to slow down in 2024, with moderate growth. An expansion in the service sector was contrasted with persistent weakness in essentially all other sectors, particularly in manufacturing and automotives. Consumer and business sentiment in Italy remained low throughout 2024, in a context of weakness in the main economies of the euro area too. Aggregate demand partly benefited from consumption, supported by a recovery in real household disposable income, moderate inflation, and improved access to consumer credit. Nevertheless, consumer price inflation is expected to remain low (1.6%), and Italian GDP growth is expected to strengthen moderately, with forecasts at 1% for the next year.
On the supply side, GDP growth was only driven by the services sector in 2024, while essentially all other sectors declined. After a contraction in 2023, industrial production also fell in 2024. Sector performance varied considerably. The automotive and fashion sectors (leather goods, clothing, and textiles) saw the highest contraction. Moreover, after the construction sector’s investments recorded extraordinary growth since 2021, the residential construction sector was heavily affected by the reduction of tax credits for housing renovation in 2024. It is expected to face these risks in 2025 as well, when other tax benefits will expire. Although nonresidential construction will likely benefit from the National Recovery and Resilience Plan—its resources and more favorable bank lending conditions—an overall decline in construction is expected.
Because of their importance (considering production, revenues, and occupation), the strong reduction in production in the automotive and fashion sectors represents a significant risk to Italy’s growth. Specifically, the decline of the automotive sector (the decrease in automotive production was far above the decrease in overall industrial production) is essentially linked to different phenomena. Nevertheless, a weaker demand appears to be the most critical factor. In fact, demand is heavily affected by both higher costs (especially for electric vehicles) and changing consumer habits (with younger generations apparently being less interested in car ownership and more inclined toward vehicle-sharing). Moreover, the use of electric vehicles is still particularly hindered in Italy due to limited availability of charging infrastructure, long charging times, and reduced driving ranges.
Within the services sector, which predominantly drove Italy’s GDP growth in 2024, the main driver remains the tourism sector, which continued to expand, supported especially by foreign tourists. Total tourism spending in Italy increased in 2024, mainly driven by an increase in the average spending per tourist. Specifically, this increase is entirely due to international visitors, overcoming a slight decrease in the domestic component, which reflects the weak dynamics of national consumption. Tourism is a key sector of the Italian economy, contributing directly and indirectly (with a high spending “multiplier”) to a significant part of the national GDP and occupation. Among several different tourist attractions in Italy, it is worth mentioning the special role that can be attributed to areas associated with medieval history (borghi), which represent an invaluable historical, artistic, and cultural heritage in the country.
Despite the fact that these villages are characterized by strong depopulation compared to average Italian municipalities, results from a recent piece of Deloitte’s economic research study22 show that they provide an important contribution to Italian GDP and employment. Thus, the development and improvement of transport and digital infrastructures in these areas represent a fundamental opportunity in the next years to counteract depopulation and foster their development and attractiveness.
Real household disposable income increased in 2024, driven by ongoing employment expansion, higher wage growth, and moderate inflation. Moreover, the more recent mild reduction in interest rates is also favoring loans and reducing costs for households. As a consequence, spending on goods, which declined in the previous year, gradually recovered in 2024. Nevertheless, in an uncertain geopolitical context, consumption recovered only moderately due to households trying to recover savings depleted in the previous years due to high inflation. In fact, after two years of heavy reduction, an especially high increase in savings held back consumption in 2024. Next year, households are expected to gradually normalize their savings rate, increasing consumption again.
In Italy, inflation slowed down in 2024 and was among the lowest for major European economies. Nonetheless, electricity and gas prices are still higher in Italy than in other large European economies such as France and Germany, affecting the competitiveness of Italian companies. In 2025, inflation is expected to remain below levels expected in the euro area and the European Central Bank target of 2%. Thus, moderate inflation, together with nominal wage growth, is expected to lead to a gradual recovery in real wages. In general, the Italian labor market contracted last year: In fact, while the number of employed people continues to rise, hours worked have decreased, especially in the industrial sector.
Finally, Italian goods exports were stagnant in 2024, as a result of the decline in sales in EU markets (especially exports to Germany, Italy’s largest export market), balanced by an increase in sales in non-EU markets (especially exports to the United States, Italy’s second-largest export market). Italian goods imports, however, declined significantly last year, resulting in net exports contributing positively to GDP growth last year.
Italy’s investments will continue to be affected by high financing costs and the reduction of incentives in the construction sector; consumption and exports are expected to strengthen next year, supported by the recovery of households’ purchasing power and international trade. Moreover, the Italian economy is expected to maintain moderate positive growth in 2025, essentially in line with the expected average for euro area economies; it will face slightly higher consumer inflation, but at levels lower than the euro area average.
Germany
– Alexander Boersch
Slight recovery amid high uncertainty
The year 2025 is expected to be decisive and likely quite turbulent for the German economy. The federal election in February is expected to shift economic policy priorities, while a new EU Commission took office at the end of 2024, along with a new US administration that will take office at the end of January. Overall, a slight economic recovery is expected in 2025 due to falling interest rates—although growth levels are set to remain minor. However, the structural challenges facing the German economy do not suggest a dynamic development. At the same time, economic forecasts suffer from great uncertainty, especially given the possible trade policy shifts in the United States. Thus, economic policy needs to be focused on improving economic competitiveness and reducing uncertainty.
German exports did not perform well in 2024 and could not provide impulses for economic growth. The extent to which this can change in 2025 will depend heavily on the trade policy of the new US government and the development of relations between Germany’s two most important export markets, the United States and China. However, foreign trade will not be able to play its traditional role in the new trade and geopolitical environment, that is, as a stimulus for investments.
Overall, we expect a growth rate of 0.7% for Germany in 2025. Although this would be more than 2024, it is far from a dynamic recovery or even from the growth trend of the 2010s. A higher growth rate requires structural economic policy reforms both in Germany and in Europe. In the short term, it is imperative that economic policy uncertainty is mitigated to see growth driven by falling interest rates and the subsequent consumer spending.
France
– Olivier Sautel and Maxime Bouter
In 2024, at an estimated 1.1%, GDP growth in France was driven by public consumption, public investment, and foreign trade.25 The trade balance is improving, contributing positively to growth due to a fall in imports and sluggish private demand throughout the year.26 The Paris Olympic and Paralympic Games positively contributed to GDP (0.25 percentage points for the third quarter), but this temporary boost will dissipate by the last quarter of 2024.27
In 2025, GDP growth is projected to be 0.9%,28 likely driven by private demand. Reduction in public expenditures and fiscal policies aimed at reducing the public deficit will contribute negatively to growth. Rising nominal wages, outpacing inflation in 2024, should continue in 2025, boosting households’ purchasing power. Falling interest rates are expected to reduce savings incentives and contribute positively to private demand. Despite these positive effects, rising unemployment might weigh on private demand. Business investment is expected to remain sluggish due to the lagged transmission of interest rate cuts, the end of public aid to firms, and a rise in the fiscal tax rate.29
The role of budgetary and monetary policy
Public measures, such as “France Relance” and “France 2030,” drove growth in 2023 and 2024. However, these are being withdrawn, which could negatively impact growth in 2025.30 Despite the European Central Bank’s interest rate cuts in 2024, the lag in accommodative monetary policy means the policy impact on growth will remain negative in 2024 but would turn positive in 2025. Therefore, the role of the policy mix should shift from a positive fiscal and negative monetary impact in 2024 to the opposite in 2025.31
Evolution in the labor market
In 2024, the French labor market was buoyant, with a 7.3% unemployment rate, the lowest since 2008. However, job creation slowed from 500,000 net jobs in 2022 to 210,000 in 2023, and 73,000 in the first half of 2024 on a year-over-year basis. In 2025, an economic slowdown may increase unemployment to approximately 8%,32 with a potential decrease in 2026 due to the expected rise in economic growth rate.33
Public funding
Since 2023, according to the European Commission, France’s public deficit has been higher than other euro area countries, which reached 5.5% of GDP in 2023 and is expected to rise to 6.4% of GDP in 2024.34 The European Commission projects the deficit to decline to 5.3% in 2025—levels still unprecedented except during crisis periods. Unsurprisingly, the European Union Council initiated an excessive deficit procedure against France in 2024, enforcing public adjustment measures to meet the Maastricht criteria. The French government announced cuts across all ministries in 2024, with further measures anticipated for 2025, including reduction in household aid of 12 billion euros (0.4% of GDP) and increased fiscal revenue from large firms of 21 billion euros (0.7% of GDP). These measures should lower the deficit to 5.3% by 2025, although it could increase due to slow nominal GDP growth and higher interest charges.35 Public debt is projected to rise from 109.7% of GDP in 2023 to 112.7% in 2024 and 117.1% by 2026.36
Outlook for France
The economic outlook for France in 2025 appears challenging. The shift from public to private demand as the main growth driver is fraught with uncertainties. While rising real wages and lower interest rates provide some support, they may not suffice to counteract the adverse effects of reduced public expenditure and higher unemployment rates. Additionally, the sluggish investment environment further dampens growth prospects. Fiscal consolidation measures, although necessary, will likely constrain economic activity and keep the public deficit elevated. Considering these factors, the 2025 economic landscape for France looks challenging, with significant risks stemming from political instability and international geopolitical tensions.37
Spain
– Ana Aguilar
The Spanish economy has outperformed expectations and European growth levels in 2024. In 2025, Spain is expected to grow at about 2.5%38—double the eurozone average.39 Spain has benefited from the global trend of services sector resilience. Further, the country’s manufacturing sector remains in expansionary territory at the end of 2024, in contrast to the situation in Europe. Purchasing manager’s indices indicate that Spain will maintain its growth in the coming months, in services and manufacturing, while economic confidence remains positive.
Consumption is expected to be the main driver of growth in 2024, supported by employment and wages growth, alongside lower interest and savings rate. The labor market will grow, supported by services and manufacturing growth. At the end of 2024, employment continued to expand (2.4% in November) in the majority of sectors. The unemployment rate is expected to inch lower, although it will remain markedly above the EU average.
Inflation in 2025 is expected to consolidate around the European Central Bank’s target of 2%, following progressive declines throughout the second half of 2023 and 2024. In contrast, wages will rise at about 3%, in line with the agreement between businesses and labor union representatives in 2023, to gradually recover purchasing power following the inflation surge between 2022 and 2023. At the end of 2024, retail spending continued to expand (3.5% year over year in November). The savings rate has declined slightly although it remains high (13% in the second quarter of 2024 versus 14% in the previous quarter), 40 and households have continued to reduce their debt levels (household debt was 45% of GDP in the second quarter of 2024 versus 49% in the second quarter of 2023).41 Further reductions in interest rates will reduce households’ financial burden. Interest rates in the eurozone are expected to continue in their downward trajectory to about 2% toward the end of 2025, from the current 3% for deposit facility rates.42
Spanish GDP growth in 2024 was in part driven by public spending, a contribution that is expected to moderate as the effect of recent crises abates, and the EU fiscal rules begin to constrain trajectories. Public deficit is expected to inch below the 3% threshold in 2025, supported by the removal of anti-crisis measures, economic growth, and fiscal measures. The European Commission has evaluated the medium-term fiscal-structural plan presented by Spain and recommended its approval by the EU Council. The plan sets out a fiscal adjustment to be achieved over the next seven years to place the ratio of public debt on a sustainable path. The Spanish Authority for Fiscal Responsibility highlights that net spending in practice may lead to a lower reduction in the public debt-to-GDP ratio than anticipated in the plan, and therefore, a further adjustment may be required.43
Exports will contribute to economic growth in 2025, although possibly less than in 2024, as tourism export growth is expected to moderate somewhat following a couple of very strong years. Euro depreciation against the US dollar will favor exports, but progressive deployment of tariffs could begin to affect goods trade as 2025 progresses, with greater effects expected to be felt from 2026 onward. The Spanish economy is less exposed than other European economies: Its goods exports to the United States represent 5% of total goods exports compared to 20% for the European Union on average. Plus, the United States has a trade surplus with Spain. However, tariffs against EU products would affect Spain.
Investment, key to achieving growth and increasing productivity, was weaker than expected in 2024 but should recover in 2025 against an environment of lower interest rates, major transformational challenges, and a severe process of deleveraging by businesses (nonfinancial business’ consolidated debt was 65% of GDP in the first quarter of 2024 versus 91% at the peak of the pandemic the first quarter of 2021 and 120% at the peak of the financial crisis in the second quarter of 2010).44 Nonetheless, lingering uncertainty (the main factor constraining business activity currently, according to the Spanish central bank’s business survey),45 may dampen business’ efforts to drive investments.
The Nordics
– Bryan Dufour
The outlook for the Nordics
The Nordic region is expected to grow by approximately 2% in 2025, a notable improvement from the 1.1% projected for 2024. All five countries will likely experience growth above 1.5%, with Denmark leading at around 2.5% and Finland at the lower end (slightly above 1.5%). Each country will face its own challenges.
Sweden is working to address its job market but will still continue struggling with one of the highest unemployment rates in the region. Finland is expected to have a similar unemployment rate (8%) and will keep facing subdued trade prospects due to the disruption of historical trade routes following Russia’s invasion of Ukraine. Trade will also remain a key uncertainty for Denmark, affected by possible route trade route disruptions in the Middle East and the growing possibility of tariffs. Norway is poised for a long-awaited recovery in private consumption and its domestic economy, while Iceland will continue to contend with the highest inflation and interest rates among the Nordics.
Sweden
The largest Nordic economy is projected to grow by around 2% in 2025, following a subdued 0.6% expansion in 2024. While late-2024 economic indicators remained weak, forward-looking signals point to a possible recovery in 2025. With inflation expected to drop significantly (falling below 1%), private consumption is set to be the main driver of growth, growing by 2% after a nearly flat performance in 2024 (0.1% decline). Investment is also expected to rebound, growing by 2% after a 2.2% contraction the previous year, supported by an easing of credit conditions.
Unemployment, while remaining the highest among the Nordic countries at 8.3%, is forecast to follow a downward trend.
Norway
Norway is the only Nordic economy that has not lowered its policy rate since it peaked at 4.5% in October 2023. The first rate cuts are expected in early 2025, though a cautious approach will be maintained, as inflation is projected to remain slightly above the 2% target. This shift is expected to boost investment, particularly in non-oil sectors, which have seen subdued activity over the past two years. Investment is forecast to grow by 3.1%, supporting overall GDP growth, which is projected to exceed 1.5% but remains below 2.0% (from 1.2% in 2024). Private consumption is also expected to play a key role, rising by 1.8%, as nominal wage growth is set to outpace inflation for the first time in three years.
Denmark
In 2025, the Danish economy is projected to be among the top performers in the Nordics, with growth expected to stand between 2.0% and 2.5%, after growing 2.8% in 2024. This relative slowdown is expected in exports, particularly from the maritime and pharmaceutical sectors.
Being the most trade-dependent economy in the Nordics, Denmark will be especially exposed to the trade uncertainties currently shaping geopolitics. Domestic demand is expected to strengthen, however, despite inflation being expected to rebound (from 1.4% to 2%), and will partially offset the slowdown in exports-driven growth. Private consumption is forecast to rise by approximately 1.5% following a near-stagnant 2024, while investment is set to increase by 2.2% after a 1.4% contraction the previous year.
Finland
The only Nordic country in the eurozone is also the most sensitive to geopolitical tensions with Russia, which remain a key unknown for Finland in 2025. This issue will continue weighing on Finland’s trade prospects. Nevertheless, after a strong recess in 2024 (6.5% decline), investment is expected to strongly pick up in 2025 (3.4%), driven by declining interest rates.
Finland will also continue to benefit from a controlled inflation (expected just below the 2% target), supported by a continued accommodation from the European Central Bank, with private consumption growing at 1.8% (from 0.5% in 2024). Recently announced value-added tax increases on select goods are not expected to have a significant impact, though additional measures could be introduced as the economy strengthens.
Iceland
Iceland has experienced a sharp slowdown in economic growth in 2024, with a projected increase of just 0.7%, down from 5.0% the previous year. A recovery is expected in 2025, with growth projections remaining above 2.0%, though likely below 2.5%. Domestic demand is expected to drive most of the growth, alongside a rebound in foreign tourism.
However, Iceland will continue to face the highest inflation (above 3%) and interest rates (above 7%) in the Nordics, which will dampen growth. Additionally, the potential impact of volcanic activity remains a key uncertainty, with ongoing risks being monitored in the Reykjanes Peninsula.
Poland
– Aleksander Laszek
Poland’s economic rebound in 2024 was atypical, in as much it defied the weakness of its main trading partner, Germany, and progressed rather slowly.
Domestic demand was driving the growth of the Polish economy in the past year. Looking at economic sentiment, consumer confidence was the strongest component, according to the European Commission data. A strong labor market boosted wages and real incomes, benefiting the service sector and domestic market producers. Meanwhile, global economic weakness led to low export figures. These macro conditions were reflected in the enterprise sector, with domestic sales growing while exports declined.
The Polish economy will likely grow by 3% in 2024.46 While this performance appears strong compared to other EU countries, placing Poland among the five fastest-growing economies, it is relatively weak when viewed against previous recoveries and the long-term average growth rate of 3.8% over the past 20 years. This slowdown may be attributable to subdued foreign demand, as well as long-term factors such as an aging population.
Since 2019, the number of working Poles has been declining due to aging; however, this effect has so far been offset by an increasing number of foreigners, mainly from Ukraine, working in Poland. It is noteworthy that, over the last five years, Poland has been one of the strongest-growing European economies, with a cumulative growth of 12%. This is impressive when compared to Germany’s 0.5% growth during the same time period. However, it is only slightly higher than the 10% growth of the United States, which represents the technological frontier that Poland continues to strive to catch up with.
In 2025, we expect economic growth to accelerate to 3.5%. This would place Poland in the top 3 EU countries in terms of GDP growth rate, but this is conditional on the revival of the German economy and increased investment, partly due to a larger absorption of EU funds. Unfortunately, Poland faces elevated inflation and a large public deficit due to increased social transfers and necessary rearmament following Russian aggression in Ukraine.
Global changes are expected to impact Poland’s economic growth next year. As highly open economies, Poland and Central Europe may benefit or suffer from post-electoral policy changes in the United States. On one hand, deregulation under the new administration could boost innovation and global growth, while on the other hand, tariffs would hurt Central Europe, even indirectly by hitting its main trade partners in Western Europe. Tax cut–driven fiscal expansion could lead to higher interest rates in the United States, resulting in capital flight from emerging markets and Central Europe. Furthermore, any weakening of NATO guarantees could increase risk premiums in the region, especially as at the moment export-oriented Germany faces high policy uncertainty.
We expect Poland to remain Europe’s fastest-growing large economy in the medium term. With a relatively low GDP per capita, there is significant room for continued convergence, as seen over the past 35 years. While several sectors and companies have already achieved European levels of labor productivity, inefficiencies remain elsewhere. As fewer people work in less productive establishments, overall productivity will rise, though more slowly than before. The shrinking working-age population poses a risk, but some reserves remain. Although unemployment in Poland is among the lowest in the European Union (around 3%), there is still some room in employment rate. Additionally, the last decade has seen successful integration of foreigners into the Polish workforce.
Poland has weathered the COVID-19 pandemic, the Ukraine-Russia conflict, and recession in Germany remarkably well. There are apparent challenges in the years ahead, both external like the ongoing conflict between Ukraine and Russia and global trade disputes, as well as internal like huge public deficit and aging population. Nevertheless, the proven track record of resilience of the Polish economy and impressive growth pattern should continue.
United Kingdom
– Debapratim De
After a surprisingly strong start to 2024, the United Kingdom’s economy enters 2025 with faltering growth, weakened business sentiment, and rising inflation.
GDP data available at the time of writing shows that the economy has grown in just one of the five months to October. Manufacturing activity remains particularly weak. Business surveys suggest the sector is contracting again, after having briefly recovered from a prolonged post-pandemic slump. Services output continues to grow, although at a slower pace than in the first half of 2024.
The newly elected Labour government’s commitment to policy stability and public investment has been well-received by businesses.47 But its autumn budget unveiled the biggest post-election tax rises since the early 1990s, which are to be borne largely by employers.48 That seems to have dampened corporate confidence and appetite for capital expenditure.
Consumer demand has been tepid, weakened by the lagged effect of interest rate rises and enduring “sticker shock” from the earlier spike in inflation. Confidence among households has recovered from its trough in 2022 but remains well below pre-pandemic levels. Despite low unemployment and a recovery in real wages, British consumers continue to save more than the pre-pandemic norm.
They also report improvements in their personal financial conditions but remain cautious about the general economic environment. This sentiment is perhaps understandable, given the recent slowing of activity and rises in headline inflation. From 1.7% in September to 2.6% in November, inflation has accelerated, driven by higher transport, housing, and energy prices.
Add to that a difficult external environment, with lackluster growth in Europe’s largest economies and continued geopolitical uncertainty, and you have the ingredients for a pessimistic outlook.
Yet, the United Kingdom’s economic growth is set to pick up, from a forecast of 0.8% in 2024 to 1% this year.
The primary driver of this acceleration will be the fiscal easing announced in the autumn budget. The government’s day-to-day spending is set to rise by 49 billion pounds (around 1.7% of GDP) in the next financial year, a significant jump from the average annual rise of 14 billion pounds seen between 2010 and 2019. The bulk of this additional expenditure should go toward wages and employment, bolstering household consumption and demand. A rise in government investment should also support private sector activity, likely with a lag.
Monetary easing should also contribute to the pickup in growth. Headline inflation has risen since September and is likely to edge up further. But we expect it to average well below 3% this year. More importantly, underlying inflationary pressure, as measured by core inflation or price rises for nonvolatile services, has remained steady in recent months, and seems set to ease somewhat. This should create room for rate cuts by the Bank of England, supporting growth.
Finally, despite cooling, the labor market remains tight by historical standards. Unemployment is low, and wage growth is quite strong. Tax rises for employers may imply slower private sector jobs and income growth this year, as corporates pass on some of their additional costs to employees. But a sharp rise in unemployment or a squeeze on real wages seems unlikely. We expect real wages to rise throughout 2025, eventually leading to a broad-based pickup in consumer demand.
The budgetary boost to public spending might take some time to show up in GDP figures, however. We are forecasting sluggish growth over the winter and a gradual acceleration from spring onward, with the full impact of fiscal easing and robust household spending felt only in the second half of 2025.
There remain downside risks, however. Developments in geopolitics and global trade could derail the recovery. At home, as momentum shifts from the private to the public sector, there could be a sharp squeeze on business investment and capital spending. But, on a balance of probabilities, fiscal easing, and a continued improvement in consumers’ financial condition seem likely to be the biggest determinants of output this year.
A pickup from 0.8% to 1% may not sound like much; after all, 1% growth is well below the United Kingdom’s post–financial crisis trend. Yet, given the underlying momentum and external headwinds, this seems a benign outcome. The United Kingdom would still likely outperform its three largest European peers this year.
China
– Xu Sitao
Over the past three months, a widely accepted notion among investors49 is that policy support from Beijing will essentially set a floor for the highly volatile domestic stock market; but it will not be enough to rekindle consumer confidence or fundamentally resolve the fiscal difficulties faced by most local governments. The perception is that the government’s commitment to boosting domestic demand remains incremental and vague.
Against this backdrop, the Central Economic Work Conference, held on December 11 and 12 in Beijing and presided over by President Xi Jinping, provided additional clues about how policymakers plan to lend relief to the economy. According to President Xi, the economic growth target of around 5% for 2024 will be met. However, going forward, due to a challenging external environment and the economic transition in the post–real estate era, inadequate demand will remain a key feature of the economy. Therefore, appropriately loose monetary policy and fiscal expansion will be undertaken in 2025.50 Additionally, at the conference, stabilizing the property and stock markets was cited as a near-term objective.
Market skeptics have been focusing on the gap between the central government’s pledge to roll over local government debt and the fiscal shortfalls faced by many local administrations.51 The fiscal deficit-to-GDP ratio is expected to rise above the 3% ceiling in 2025 but is unlikely to increase significantly beyond that.
Why does the central government hold such a seemingly conservative stance when almost all sovereign governments, especially in the developed world, have resorted to maximum stimulus in recent years? There are three key reasons.52 First, China seeks to avoid the side effects and pitfalls of the four-trillion-yuan stimulus rolled out in late 2008. Second, China wants to preserve some fiscal ammunition in case tariffs rise substantially. Finally, policymakers are reluctant to pass on blank checks to local governments, which have historically relied heavily on windfalls from the booming real estate sector.
The bigger question is whether these policy responses will allow the economy to avoid a potential deflationary spiral, assuming the property market has not yet fully run through its downward spiral. Given the expectation of more trade barriers erected in the United States, it will be extremely challenging for China to rely on external demand to replace the real estate sector as a growth driver or to export its overcapacity.
For China, it is natural to prepare for the worst: the potential for a substantial increase in tariffs, which would effectively mean a distinct likelihood of China losing its Permanent Normal Trade Relations status. What is likely to be China’s policy response to such an external challenge? The fiscal lever will likely remain a key instrument alongside the exchange rate. We believe Beijing’s actions will be largely symbolic, with a 5% to 7% depreciation of the yuan in 2025. As such, China’s growth in 2025 is expected to be around 4%.
Asia has withstood a slumping yen over the past two years because most Asian currencies are undervalued, and the balance of payments remains in a reasonably strong position for most economies. However, a meaningful depreciation of the yuan may bring China’s extraordinary competitiveness to the forefront. For China, in addition to reflationary measures, better market access will be necessary to address “reciprocity” and the ongoing criticism against Chinese exports.
In short, China has not yet moved into the camp of high-income countries but still has ample room for catching up. However, its policies will likely face more acute trade-offs in 2025.
Japan
– Shiro Katsufuji
Japan’s economy has exited its long-lasting deflationary environment, and we expect growth and price stability to continue in the coming years. We anticipate 1.1% real GDP growth in 2025, up from slightly negative growth in 2024 of 0.2%. The negative growth in 2024 was mainly due to a one-time factor—the temporary suspension of automotive production by Japanese automakers.
Also, the higher inflation that initially outpaced wage growth undermined personal consumption. Nevertheless, we have seen 3.6% and 5.1% wage hikes in the spring wage negotiations (shunto) in 2023 and 2024, respectively.53 Now, wage growth has caught up with inflation, allowing real wage growth to turn toward positive territory. Even higher wage hikes are expected in the 2025 shunto, possibly of 6% or more. Thus, we can reasonably expect “above potential” real GDP growth in 2025, mainly driven by consumer spending.
The Bank of Japan’s goal of “sustainable inflation accompanied by wage growth” has been achieved and will continue for the foreseeable future. We expect the central bank will continue to hike the policy rate through 2025, followed by the 0.25% hike in 2024, until the rate reaches the neutral level of 1%.
Japan’s economic fundamentals suggest firm economic growth for the coming year. Real personal income is likely to increase due to stronger wage growth, which will drive overall economic growth. Tourism is also booming in Japan, with foreign tourist traffic now standing above pre-pandemic levels. Though inflation remains a risk factor for mid-to-lower income households, the government continues to help consumers through fiscal measures, such as its decision to resume the subsidy for electricity bills from 2025. The labor market is generally tight, with the job openings ratio at a healthy 1.2 to 1.3. Consumer sentiment is at a modest level mainly due to high inflation, but sentiment is likely to improve as real income growth generates purchasing power for households.
The business sentiment survey from the Bank of Japan (tankan) indicates optimistic views in the services sector. Sentiment in the manufacturing sector is somewhat less optimistic but stable. In addition, corporate profits are at historical highs. This suggests that firms are successfully passing on higher production costs to their sales prices, which are generally accepted by purchasers. On the other hand, business investment has been relatively modest compared to the acceleration in consumer spending. This may be because the uncertainty surrounding the global economic and geopolitical environment gives less incentive to firms to increase their production capacity. Plus, a subdued Chinese economy may negatively affect manufacturers and exporters.
Exports are expected to be one of the drivers of Japan’s economy. The weaker yen will drive tailwinds for exporters and manufacturers. A weaker currency is one of the key reasons for strong corporate profits. Going forward, the foreign exchange market may be less favorable to exporters. We expect a stronger yen in 2025 as the Federal Reserve continues its rate cuts and the Bank of Japan continues its rate hikes. Also, the possibility of trade barriers in the United States could put downward pressure on Japan’s exporters. As a result, we stay cautiously optimistic about the business sector in the coming year.
Financial market conditions are likely to be stable and will remain favorable to the real economy and consumer sentiment. Even if the central bank continues to normalize its monetary policy, the pace of rate hikes will be modest and is unlikely to be a significant drag on the economy. Financial services will enjoy the larger interest margin generated by higher yields. A stronger yen will partially mitigate higher import prices and production costs for the business sector.
Still, there are a few risk factors arising, mainly from overseas, including a reduction in the US trade deficit with its major trade partners including Japan, higher tariffs on Japanese goods, which could cause significant damage to Japan’s manufacturers, geopolitical risks in the Middle East and East Asia, which, if materialized, could create an acute shock to the economy, and weakness in China’s economy, which could be another risk to Japanese growth.
Overall, we expect a firm economic expansion of Japan in the coming year, driven by domestic demand. The key risk factors are coming from abroad, such as uncertainty in US foreign trade policy and geopolitical risks, which would potentially affect not only Japan but the global economy as a whole.
India
– Rumki Majumdar
India’s growth remains resilient despite slower GDP growth in the first half of the fiscal year
India’s GDP growth slowed to 6.0% year over year in the first half of fiscal year 2024 to 2025,54 significantly below the Reserve Bank of India’s (RBI) projection of 6.9%. Consequently, the central bank lowered its annual growth forecast to 6.6% from 7.2%.55 The first advanced estimate by the Central Statistical Office pegs growth to be 6.4%. The slowdown was primarily driven by a moderation in gross fixed capital formation, which grew by 6.4% in the first half,56 as capital expenditure utilization fell to 37.3%, down from 49% last year.57 This decline was attributed to the elections in the first quarter and weather-related disruptions in the subsequent quarter. Additionally, geopolitical disruptions, particularly in the Red Sea, and rising global prices of precious metals impacted the trade balance adversely.
On the production side, gross value added grew by 6.2% in the first half of the fiscal year,58 down from 8.0% in the same period last year.59 Performance in the secondary sector remained weak at 6%, but the farm and service sector demonstrated resilience.60
However, a closer look reveals economic resilience and emerging trends worth noting.
Resilience in pockets
Despite the overall economic slowdown, several sectors managed to sustain positive momentum, highlighting pockets of strength within the economy. These sectors played a critical role in supporting growth amid external and domestic pressures.
• Rural consumption: Agricultural growth hit a five-quarter high of 3.5%,61 driven by strong monsoons, healthy kharif (or monsoon or autumn crops) harvests, and improved rabi (winter crops) sowing in the second quarter. Indicators like sales growth in fast-moving consumer goods and a lower number of jobs demanded under the Mahatma Gandhi National Rural Employment Guarantee Act of 2005 reflect rural consumption strength this fiscal year.
• Services: Services grew 7.1% in the first half of the fiscal year, with a large contribution coming from the financial, real estate, and professional services sectors. Services exports also surged 12.8% year over year, reaching US$248 billion from April to November 2024, with November exports reaching the highest levels ever.62 This shows the rising significance of services to growth and urban income
• High-value manufacturing exports: With the support of government schemes, Indian manufacturing is moving up the value chain. Electronics, engineering goods, and chemicals now make up 31% of exports,63 supported by contributions from micro, small, and medium enterprises and rising credit availability.
• Fiscal deficit control: At 3.1% of GDP in the second quarter,64 the fiscal deficit remains manageable, with government spending on capex expected to rise significantly in the second half of the year to meet annual targets.
Challenges and risks
• Inflation: Inflation breached the RBI’s target rate of 4% in the past quarter, prompting the RBI to maintain policy rates for the 11th consecutive time. Core inflation is inching upward as well, risking a spiraling of inflation expectations. While balancing growth and stability objectives will likely become difficult for the RBI amid the current global, economic, and political environment, better farm output, base effects, and past government intervention to improve the supply side should ease price pressures.
• Global trade uncertainty: Policy changes in the industrial countries and geopolitical disruptions could weigh on trade, reducing export demand. This may also impact capital flows into the country as uncertainties weigh on investor sentiments. Besides, central banks in the West may not go for as many rate cuts as anticipated earlier, so global liquidity is likely to remain tight.
India’s near-term outlook
We have revised India’s GDP growth down to a range of 6.5% to 6.8% for fiscal year 2024 to 2025, due to slower-than-expected first-half performance. However, the second half is expected to benefit from strong domestic demand, driven by government capex spending. Growth could improve from 6.7% to 7.3% in fiscal year 2025 to 2026, but significant risks remain, tied to global recovery and geopolitical dynamics.
We expect a significant push from the government as it presents the Union budget for fiscal year 2025 to 2026 in a fortnight. The focus would be on:
• Reviving capex spending: Prioritize infrastructure investments and push states for better utilization of the allocated capex funds for the rest of the year.
• Encouraging domestic investment: Simplify investment processes, incentivize retirement fund investments, and increase financial literacy to channel household savings into capital markets safely.
• Enhancing workforce skilling: Address skill gaps, specifically in technology, and create future-ready talent, boost employment, and attract global investors.
• Driving tech innovation: Promote digital infrastructure and ensure digitization of government services to improve the efficiency of service delivery and enhance inclusion.
• With targeted policies to boost capex and household consumption, the government can leverage its fiscal space to ensure sustainable growth and cushion the economy from global uncertainties.
Australia
– Lester Gunnion
Looking back at a challenging 2024
In 2024, Australia’s economy is likely to have grown at its slowest annual rate—besides during the pandemic—since the recession of the early 1990s.65 Deloitte Access Economics expects that official statistics in March will confirm that annual real GDP growth for the calendar year 2024 was about 1.0%. More strikingly, the Australian economy has been going backward on a per capita basis since early 2023.66
Sticky inflation in the services sector and elevated borrowing costs have weighed on economic activity. The Reserve Bank of Australia, unlike its peers in other developed economies, has maintained its policy interest rate since late 2023, at its highest level in more than a decade. A few factors have contributed to this divergence in monetary policy. For instance, the wave of post-pandemic inflation and the subsequent commencement of interest rate hikes occurred later in Australia than they did elsewhere. Further, the central bank did not raise interest rates as high as its peers in other advanced economies. This was because inflation peaked at a comparatively lower rate; monetary policy transmission in Australia is comparatively more effective due to the elevated share of variable rate mortgages and relatively high house prices, and the Reserve Bank of Australia aimed to preserve early gains in the labor market as an economic recovery took shape.
Additionally, despite continued moderation in inflation levels, the central bank is not sufficiently confident that inflation will continue to slow to the target range of 2% to 3% within a tolerable time frame.67 Two main factors have held the Reserve Bank back. First, growth in wages has been elevated due to a tight labor market. Second, even though this growth has been decelerating, weak gains in productivity have kept unit labor costs relatively high.
The script for 2025 is slightly brighter …
The weak momentum from 2024 is likely to have spilled into 2025. However, there is reason for cautious optimism through the rest of the year.
The tight labor market is expected to gradually return to a more sustainable balanced state. The unemployment rate—a lagged indicator of economic activity—is expected to continue trending up in early 2025. However, a sharp deterioration is unlikely, as profit margins and job vacancy rates are anticipated to continue absorbing some of the impact of weak demand in the previous quarters.
More slack in the labor market will likely see wage gains and inflation slow further. This is expected to shift the central bank’s focus away from upside risks to inflation toward weak growth momentum. A monetary easing cycle is likely to commence during the first half of the year. Lower inflation and lower borrowing costs, along with a still healthy labor market, will mean that household spending could get a modest boost. Households will also benefit from the cumulative effect of tax cuts implemented in 2024 and may receive other forms of fiscal relief in the form of additional energy rebates. Lower policy rates will ease the burden on the third of Australian households that have a mortgage.
Government spending and investment—both a bright spots through 2024—are likely to continue to support growth, especially in the run up to the federal election, which will be held during the first half of the year.
External demand, however, could be a drag on the growth outlook in 2025, especially as Australia’s largest export destination, China, continues to undergo a structural slowdown.
Broadly, despite some risks, there is a good chance that Australia will complete a “soft landing” in 2025. Deloitte Access Economics sees the unemployment rate edging up to between 4.3% and 4.5% by the end of the year, while real GDP growth is forecast to improve modestly to 1.6%.
Elevated uncertainty in the global economy could upend the story …
The narrative for 2025 is very likely to be colored by elevated uncertainty stemming from geopolitics. This could play an outsized role in Australia’s outlook through the coming years. For instance, an escalation in trade tensions could lead to a sharp slowdown in Australia’s major trading partners. This would weigh on Australia’s exports and currency and would likely reduce real GDP growth forecasts.
New Zealand
– Liza Van der Merwe and Ayden Dickins
New Zealand’s economy is emerging from a difficult 2024, positioned for recovery—but an eye to the future is required to secure long-term prosperity for the country’s people.
The last 12 months have been difficult for households and businesses across New Zealand. While in headline GDP terms, the economy has bounced in and out of a series of technical recessions over the last two years, in per capita terms, the New Zealand economy has endured a sustained and deep downturn. With the stage set for recovery, it is imperative to begin prioritizing longer-term issues facing the economy.
In September 2021, the Reserve Bank of New Zealand led its international peers in hiking policy interest rates68 in response to rising inflationary pressures. In June 2022, annual consumer price inflation peaked at 7.3%69 before beginning a slow decline as restrictive monetary policy settings (which transmit with a relatively large lag in New Zealand) saw demand decline significantly.
In September 2024, New Zealand was back to better ways—annual inflation reached 2.2%70—a significant milestone marking the return of inflation to not only within the Reserve Bank’s 1% to 3% target band, but also near the important 2% midpoint. This has been accompanied by a series of interest rate cuts, totaling 125 basis points since August 2024; and we expect further cuts to extend into 2025.
While this is good news for households and businesses in New Zealand and has allowed for a shift in discussion from recession to recovery, the timing may not help spare further economic downturns. Monetary policy transmits in New Zealand with a lag. This is because most household debt is in the form of mortgages, and the vast majority of mortgages in New Zealand are fixed-term ones, for one to five years.
What this means is that cuts to interest rates will take time to stimulate economic activity. And while we wait for cuts to take effect, households and businesses will continue to endure tough times.
The good news is that interest rate cuts will eventually flow through—we are forecasting a small but symbolically important expansion of the New Zealand economy over 2025, and further growth beyond this. There are several key short-term risks to this outlook, such as potential geopolitical developments and uncertainty around how New Zealand’s exports could be impacted by tariffs, and these could impact the delay and extent of recovery expected over 2025 and 2026.
While these short-term risks need to be monitored and considered, we believe that it is time to prioritize the numerous longer-term challenges facing New Zealand’s economy.
Key among these is low productivity. Productivity is arguably the single greatest economic issue facing New Zealand—by most measures, the country lags behind its OECD peers, and the consensus is that this is unlikely to change. Bucking this trend and unlocking productivity growth will be key to enabling a new era of economic prosperity in New Zealand, but it will require carefully crafted interventions to encourage innovation through competition, technology adoption, and investment in physical and human capital. Improving productivity can also provide support in other challenges facing New Zealand, such as supporting an aging population, easing fiscal pressures, and enabling the transition to a low-carbon economy.
Israel
– Roy Rosenberg
During 2024, the Israeli economy was mainly affected by the war in the Middle East. The economy was affected through four main mechanisms.
First, there was a dramatic increase in government expenditure (mostly due to sharp growth in defense expenditures), which caused the deficit to increase to almost 7.7% of GDP.
Second, there was a decline in the exchange rate of the new shekel compared to the US dollar (a trend that began before Oct. 7, 2023, but continued during the first half of 2024), which contributed to inflation.
Third, there was an increase in risk associated with the Israeli economy that led to a continued decrease in both domestic and foreign investments.71 The uncertainty was demonstrated by a reduction of the country’s credit rating by two of the world’s largest rating agencies: S&P decreased the credit risk for Israel from AA– to A with a negative watch in October 2024. Moody’s took a more extreme approach and reduced the credit rating from A2 to Baa1 with a negative watch.
Fourth, Israel was affected by trade restrictions (mainly the reduction of steel and cement imports from Türkiye) and disruptions in the shipping route in the Red Sea, which contributed to the rising cost of some imported commodities and products.
Altogether, the constraints on the supply side due to the war were limited, relative to earlier projections, and focused mainly on the construction and real estate sectors. All those trends significantly affected GDP growth, which is expected to stand at around 0.5% in 2024 (compared with 8.6%, 6.4%, and 2% in 2021, 2022, and 2023, respectively), which means a negative growth in per capita GDP. The inflation rate in 2024 was 3.4%.
Israeli capital markets have also suffered from the high level of uncertainty during the first three quarters of 2024, while leading Israeli equity indices have underperformed compared to their global stock counterparts.
In the last quarter of 2024, we observed a much higher performance of the local indices compared to foreign indices: The return from TA 35 was 15%, while the return from the S&P 500 was only 2%. Overall, local Israeli indices slightly overperformed compared with the S&P 500, mainly driven by extraordinary returns during the last quarter of 2024. In addition, the yields of Israeli government bonds increased significantly throughout 2024, resulting in a substantial increase in interest expenditures by the Israeli government.
Despite the challenges last year, looking forward to 2025 and beyond, we find quite a few positive bright spots, mainly due to changes in the geopolitical threats Israel is facing, which have been assessed by Israeli officials as lower compared to 2024.72 The positive outlook is already demonstrated by the excess returns of the local capital market’s main indices, compared to other leading global equity indices, and substantial growth in the value of the new shekel, versus leading currencies, such as the euro, in the last quarter of 2024.73
Moreover, there exists a degree of uncertainty around future growth in private consumption: We believe that growth in private consumption in 2025 will be constrained by increased tax burdens. The future performance of the Israeli economy will depend to a large extent on the timing of the end of the war on all fronts, on how the Middle East’s geopolitical environment will be shaped post war, on the future fiscal policy of the government, and on the level of instability of the domestic political system in the country. In any scenario, the fiscal burden will create a chilling effect on the economy in the foreseeable future, given an expected increase in the defense budget, which will likely be permanent.
Notwithstanding the above, there is a considerable chance that Israel’s economy will experience a rapid recovery over the next two years. However, the realization of this scenario depends on three key parameters: whether Israel will be able to establish a strategic relationship with certain Middle Eastern countries, whether the government will adopt an efficient fiscal policy by reducing expenditures where necessary while continuing to invest in Israel’s growth engines, and whether, and how quickly, the interior political complexity in Israel will be settled in a way that creates more confidence and trust in the government, from both Israeli citizens and foreign investors. The recovery scenario also depends, of course, on developments in the global economy, particularly in Israel’s main trading partners, especially the United States, China, and European economies.
Our current forecasts for the Israeli economy in 2025 predict GDP growth of approximately 4%, interest rates remaining at a similar level of 4.5%, at least for most of the year, and an inflation rate of approximately 3%. Several opposing factors will influence the inflation rate. The rise in value-added tax and property tax can positively impact price levels, and the potential end of the war may reactivate the operations of foreign airlines and relax supply constraints in the construction industry, which would gradually help mitigate prices in the airline and housing sectors, respectively.
West Africa
– Damilola Akinbami
The year 2024 has been challenging for West African countries, particularly Nigeria and Ghana, as both nations have faced high inflation rates, elevated interest rates, weakening local currencies, and growing debt concerns.
In December 2024, Ghana held elections that were relatively peaceful, resulting in a change in government and political party leadership. Former President John Mahama won the election on his third attempt as the candidate for the National Democratic Congress, ending the ruling New Patriotic Party’s eight-year tenure.
Notably, history was made with the election of Professor Jane Opoku-Agyemang as the first female vice president of Ghana. She previously served as the minister for education during Mahama’s first term in office.
Growth outlook
The aforementioned challenges are forecast to persist especially in Nigeria, before possibly abating from the end of 2025 onward, albeit slowly. However, there is some good news: A faster pace of growth is expected in 2025 and 2026 as domestic demand picks up following an anticipated tapering of inflationary pressures and the adoption of a more accommodative monetary policy stance (largely in Ghana).
The effects of ongoing pro-market government reforms and debt-restructuring and sustainability initiatives (especially in Ghana) are expected to have started yielding some results, boosting productivity and overall economic output. A more stable domestic currency will also contribute to the projected recovery in these countries.
Nigeria is projected to expand further by 3.4% in 2025 with a marginal dip to 3.2% in 2026, according to the Economist Intelligence Unit, while the federal government is more optimistic in its Medium-Term Expenditure Framework and Fiscal Strategy paper74 at 4.6% and 4.4% for these two years. The government plans to rebase the country’s GDP in 2025. While this will increase the nominal size of the economy and probably help restore it to its position as the largest economy in Africa, the law of large numbers will kick in and result in a slower pace of growth.
Ghana is projected to record a faster pace of growth at 5.1% and 5.3% in 2025 and 2026, respectively.75 Overall, macroeconomic stability is expected to be gradually restored over the forecast period of 2025 to 2026 in West Africa as these challenges slowly moderate.
What will drive the subdued economic growth recovery between 2025 and 2026?
Moderating inflation
Base effects will be a major determining factor in the tapering of projected inflation for our focus countries in West Africa. The two years of interest rate hikes and greater domestic currency stability will contribute to a lower inflation environment.
Upside risks persist in the above projection, however, emanating from possible tax and electricity tariff hikes, insecurity (such as kidnappings in Nigeria), and supply chain disruptions that would affect food production and agricultural output. In Ghana, the lingering effects of electioneering will pose a threat to the country’s inflation trends.
Accommodative monetary policy
Ghana is expected to continue with its moderate interest rate cuts in 2025 and intensify its loosening stance in 2026, while Nigeria at best is likely to hold its stance in 2025 with possible bouts of marginal rate hikes. The African oil giant may commence a rate cut in 2026 if inflation falls steadily toward an acceptable level.
Pick up in domestic demand
Moderating inflation and expansionary monetary policy are expected to lead to a pickup in domestic demand and consumer spending as purchasing power improves. Increased private consumption and investment will likely drive growth in our focus economies.
Rising export proceeds
Nigeria’s oil output is projected to increase to 1.3 million barrels per day in 2024, from 1.23 million barrels in 2023. A further uptick is expected in 2025 (1.37 million barrels per day) and 2026 (1.38 million barrels per day). Total liquid production, which includes oil and condensates (of about 400,000 barrels per day), is estimated at 1.7 million barrels per day in 2024 and 1.77 million barrels per day in 2025.
The Dangote refinery will contribute to the improvement in the country’s external balance, as the facility is projected to meet domestic needs and have spare for exports.77 The federal government of Nigeria is proposing a 2025 domestic oil production of 2.06 million barrels per day. Addressing the insecurity in the Niger Delta will affect the probability of achieving this projection.
Ghana’s gold export receipts are expected to increase partly as a result of a US$525 million production expansion plan at Asante Gold’s Bibiani and Chirano mines78 and the start of production at the Ahafo North gold mine. The country’s gold production is projected to rise marginally to 132 tons, 136 tons, and 137 tons in 2024, 2025, and 2026, respectively, from 128 tons in 2023.79
Government policy stance will revolve around revenue generation and debt sustainability in West Africa
Rising debt is a growing concern in West Africa and Africa as a whole. Ghana received its fourth disbursement tranche of US$360 million in the last quarter of 2024, bringing total disbursements received from the International Monetary Fund under the Extended Credit Facility to US$1.92 billion. We expect the Ghanaian government to continue its fiscal consolidation between 2025 and 2026. Government will support this with revenue generation reforms that could include raising existing taxes or tariffs, and the introduction of new taxes such as a green tax. These measures are forecast to lead to a narrowing of the fiscal deficit as a percentage of GDP from 4.4% estimated in 2024 to 3.9% in 2025 and 3.6% in 2026.80
Nigeria’s debt challenges are not as severe as Ghana’s, although its debt levels are slowly inching upward, predominantly driven by depreciation of the naira. The proposed 2025 budget of 47.9 trillion naira is 36.62% higher than the 2024 budget in nominal terms; but when adjusted for exchange rate impact, it is lower by 21.95% compared to 2024. The federal government plans to issue new borrowings worth 9.22 trillion naira, compared to the 7.83 trillion naira captured in the revised 2024 budget. Part of the new borrowings will include foreign currency–denominated bonds to finance its budget deficit, after successfully raising US$900 million in its first-ever domestic US dollar bond issuance.
Government has submitted a comprehensive tax reform bill, which is expected to make the Nigerian market more competitive for investment. This bill is largely progressive, protecting smaller businesses and reducing the number of taxes at play.
However, the socioeconomic effects of these pro-market government reforms, at a time of burgeoning cost of goods and services, have led to a slowdown in the pace of reform implementation to stall the risk of social unrest. Nonetheless, the country’s fiscal deficit as a percentage of GDP is forecast to fall to 4.8% in 2025 from an estimated 5.7% in 2024. This is expected to narrow further to 4.4% in 2026.81
Risks to West Africa’s growth outlook persist despite the marginal recovery expected
The risks facing Nigeria and Ghana include, but are not limited to, the following.
• Rapidly increasing inflationary pressures
• Commodity price volatility and adverse weather conditions
• Social unrest and insecurity (especially in Nigeria)
• Structural constraints, including a wide infrastructure gap
• Power outages
• Currency weakness
South Africa
– Hannah Marais and Nikhil Jinabhai
The South African economy has stabilized following the May 2024 elections but is not free from pressures. In the 2024 national elections, the African National Congress, in power since 1994, received only 40.2% of votes.82 Unable to secure a parliamentary majority, it formed a coalition government with the centrist and pro-market Democratic Alliance—its main opposition—as well as other small parties.
Arguably, this could be the best outcome for the economic future of the young democracy.83 The coalition has ensured policy continuity and boosted international investor sentiment—amid an improved global economic landscape and the start of the global rate-cutting cycle. Furthermore, the country’s sovereign risk premium improved,84 and South Africa’s 10-year bond yield dropped to below 10%—its lowest in almost three years. The rand appreciated to its strongest level against the US dollar in almost two years in September 2024 (although it lost some of these gains on account of the US dollar strengthening post US elections),85 while stocks listed on the Johannesburg Stock Exchange had their strongest third quarter in over a decade. Moreover, South Africans celebrated almost three successive quarters of no loadshedding, following years of intermittent power outages.86
Even though investor sentiment and domestic confidence have improved, structural reforms and growing fixed investments are still imperative for South Africa’s long-term prosperity and key to achieving sufficient GDP growth to support the economy. This takes time. Unexpectedly, real GDP growth fell by 0.3% in the third quarter of 2024, which also lowers the expected growth outcomes for 2024 to less than 1%.
South Africa began 2024 on a weak front, with no growth in the first quarter. Thereafter, growth improved to 0.3% in the second quarter. Recent data from the third quarter has shown real GDP growth dipping to 0.3% despite cautious optimism.
Real GDP contraction was driven by a decline in the agricultural sector, which fell 29.6% year on year in the third quarter of 2024. Drought plagued the production of field crops (maize, soybeans, wheat, and sunflower). Adverse weather conditions also hindered the production of subtropical fruits, deciduous fruits, and vegetables. The electricity, gas, and water sector has been the fastest-growing industry at 1.6%, followed by finance, real estate, and business services at 1.3%.87
Forecasts for 2025 remain somewhat more optimistic. Inflation has eased to levels firmly within the inflation target range set by the central bank and together with further expected interest rate cuts in 2025 could boost consumer activity. Real GDP growth is expected to be approximately 1.7% in 2025, and to average only 1.8% per year from 2025 through 2027.88 This does not compare well with the International Monetary Fund’s 4% 2025 projection for emerging and developing economies, and even falls below the outlook for advanced economies of 1.8%.89
The new coalition government has confirmed its commitment to tackle the fiscal deficit, which is expected to widen over the current fiscal year (2024 to 2025) to 5% of GDP, and also see debt as a share of GDP stabilize in the next fiscal year at a ratio of 75.7%. Further, the Government of National Unity is continuing to address supply-side constraints via its reform program, Operation Vulindlela.90 Initiatives in energy, logistics, water, data, and e-visas continue with further focus areas aimed at enhancing local government capacity, tackling spatial inequality, and investing in digital public infrastructure,91 with the inclusion of youth unemployment (more than 43.2% of those between 15 and 34 years of age are unemployed, higher than the country’s official unemployment of 32.1%) as a priority area.92
Infrastructure investment through capital-based expenditure has recently been emphasized by government. Over the past two decades, gross fixed capital formation as a share of GDP in South Africa has trended below required levels. Most recently, the percentage stands at approximately 15% of GDP (2023)—equating to half of the 30% National Development Plan target.93
While faster implementation of such reforms will contribute to boosting confidence and unlocking fixed investment, government is also looking at new ways to attract private sector investment for public sector projects. Focus is on project preparation and creating a pipeline of bankable projects (a long-standing challenge in South Africa), strengthening public-private partnerships through reforming their frameworks, as well as using risk-sharing initiatives and financial instruments to unlock greater private funding. Legislative reforms to public-private partnerships and the creation of new infrastructure-financing mechanisms are other areas of focus. Yet, these will need to be accompanied by a focus on increasing the quality of governance, building a more capable state while addressing the leadership vacuum at various levels of government.
Nevertheless, after underperforming for more than a decade, South Africa has a window of opportunity. By utilizing the foundation stone of reforms, better governance, and growth-enhancing infrastructure spending, a society that is more inclusive, job-creating, and sustainable can be built.
Source : Deloitte
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