Economists' forecasts have always been tinged with considerable caution, but 2025 will undoubtedly break records. We are witnessing the end of a post-pandemic economic cycle that is colliding with the end of a post-Cold War geopolitical cycle, plunging the world into great uncertainty. "An intensification of the ongoing conflicts in the Middle East could disrupt energy markets and hit confidence and growth. Rising trade tensions might create a risk of trade growth being hampered. Adverse surprises related to growth prospects, or the path of disinflation could trigger disruptive corrections in financial markets,” warns the OECD. But the institution immediately switches to more optimistic hypotheses: "Growth could also surprise on the upside. Improvements in consumer confidence, for example if purchasing power recovers quicker than anticipated, could boost spending. An early resolution to major geopolitical conflicts could also improve sentiment, and lower energy prices".
In short, the exercise of forecasting is a particularly difficult one this year. Nevertheless, we have endeavoured to identify the major economic trends that will impact the transport and supply chain sector.
The World Bank's latest forecasts, updated in January 2025, suggest a period of extremely stable but moderate growth. In 2024, real gross domestic product grew by 2.7%, the same rate as in 2023, and the World Bank forecasts similar growth in 2025 and 2026.
Emerging markets and developing economies will continue to grow at a rate more than twice that of advanced economies. However, this category is also characterised by a stabilization of the growth rate. “Growth in developing economies is also expected to hold steady at about 4% over the next two years. This, however, would be a weaker performance than before the pandemic, and insufficient to foster the progress necessary to alleviate poverty and achieve wider development goals.”
Developing economies are entering a new, less buoyant cycle after 25 years of strong growth. “Global economic integration faltered: as a share of GDP, foreign direct investment (FDI) inflows into developing economies are at about half the level of the early 2000s. New global trade restrictions in 2024 were five times the 2010-19 average,” the World Bank notes.
With developing economies now accounting for 45% of global GDP, up from 25% in 2000, their slowdown in growth will have repercussions on the global economy. The World Bank is calling for far-reaching reforms in these countries to combat the headwinds they are facing.
India is expected to retain the fastest growth rate, ahead of Indonesia. After two years of recession, Argentina should also experience a rebound in 2025 and 2026. Finally, according to World Bank forecasts, China should continue to record a growth rate higher than the average observed for developing economies. Given its weight on the global stage, this would obviously be good news for overall growth.
Overall, the World Bank estimates that the global economy could grow more than expected, if its largest engines, the United States and China, manage to gain steam. This would require “additional stimulus measures that could boost demand” in China. In the United States, performance has been better than expected over the past two years thanks to sustained levels of household spending. This trend should continue, which would benefit the entire global economy. However, rising trade tensions could affect demand by boosting inflation. There are therefore many uncertainties surrounding the growth outlook.
The International Monetary Fund and the OECD are, as always, putting forward more optimistic forecasts. Both institutions predict global growth of 3.3% in 2025 and 2026, compared to 3.2% in 2024.
Among the advanced economies during the post-Covid period, the Eurozone did not follow a trajectory as dynamic as that of the United States. It is true that its economy was affected by a second shock which had much more violent effects in Europe than in the United States: the war between Russia and Ukraine. Growth was limited to 0.8% in 2024. “Headwinds include weak momentum, especially in manufacturing, low consumer confidence, and the persistence of a negative energy price shock. European gas prices remain about five times as high as in the United States, versus twice as high before the pandemic,” said Pierre-Olivier Gourinchas, Economic Counsellor and the Director of Research of the IMF. in an analysis published on January 17, 2025.
The European Commission, in its forecasts published in autumn 2024, announced growth of 1.3% in 2025 and 1.6% in 2026. The OECD is on much the same wavelength. On the other hand, the IMF is more pessimistic, with a forecast of only 1.0% in 2025, and 1.4% in 2026.
The difficulties of the German economy have weighed heavily on the 2024 European result. The country has experienced a second consecutive year of recession. According to initial estimates from the German Statistical Office, the decline is even slightly higher than the European Commission's estimates, down 0.2%. The year 2025 should mark the return of growth, the institutions are unanimous on this point. On the other hand, they differ on the extent of this growth, which would be 0.7% for the European Commission and the OECD, but only 0.3% according to the IMF. In France, a slowdown in growth is expected in 2025 before a recovery in 2026. The Commission's forecast for 2026, however, seems a little optimistic, with other institutions rather predicting growth of around 1%. Italy, for its part, should experience a gradual acceleration in its growth. Finally, Spain should continue to record performances significantly above the European average, but with an erosion of its growth rate.
The drastic measures taken by central banks to curb inflation in major Western economies produced the expected results in 2023, paving the way for a gradual easing of monetary policies. In 2024, the American and European central banks made several reductions in their key rates.
The OECD and the IMF anticipate a continuation of the downward trend in inflation. OECD economies are expected to register a rate of inflation of 3.8% in 2025 and 3% in 2026, after 5.4% in 2024. The IMF predicts worldwide global inflation of 4.2% in 2025 and 3.5% in 2026. However, the final push needed to return to the target threshold of 2% inflation seems the hardest to achieve. Since September, the inflation rate has been rising in the Eurozone, and also even more so in the United States, where it reached 3% in January 2025 (2.5% in the Eurozone).
In other words, the battle is not yet won. However, winning it will be decisive for two essential parameters which stimulate the demand for transport and logistics services, namely household purchasing power and business investment capacity. “Our central scenario in the Economic Outlook portrays a picture of resilience. However, this optimism is tempered by significant uncertainties. Elevated geopolitical tensions risk disrupting energy markets and supply chains, potentially driving inflation higher and dampening economic activity. More broadly, these tensions have created headwinds for trade in both advanced and emerging markets, heightening uncertainty over the future course of global trade. A more fragmented, protectionist trading environment and inward-looking policies would negatively affect competition, raise prices, and hinder productivity and growth, while also weighing on the potential for emerging market economies to catch up”, the OECD said.
The very low level of inflation in China is not good news either, as it reflects persistent economic difficulties that are holding back demand. For the whole of 2024, its Consumer Price Index rose by only 0.2%, and its Producer Price Index fell by 2.2%. The Chinese government introduced stimulus measures last year to boost consumer and business demand, with some positive results in particular sectors such as that of automobiles. But the shortage of domestic demand remains worrying in a country that is marked by rising unemployment, a slowdown in the real estate market, and high debt.
New measures are to be announced in 2025 to further stimulate consumption, improve investment efficiency and increase domestic demand. However, consumer and business confidence appears to be permanently off track.
On the external front, the year promises to be equally difficult. “China is shifting from investment-led growth to technological self-reliance, with semiconductors, electric vehicles, biotechnology, and advanced manufacturing leading the way. These priorities heighten trade tensions, particularly with the United States, and underscore the persistent challenge of industrial overcapacity”, Asia Society experts said in a statement in its report "China 2025: What to Watch".
According to the World Bank, global trade in goods and services rebounded in 2024, with growth estimated at 2.7%. Growth in goods trade accelerated in the second half of 2024, after a weaker-than-expected recovery in the first half. “The pickup was partly driven by precautionary inventory buildup in anticipation of possible trade dislocations, including those resulting from dockworker strikes on the U.S. East Coast and the Gulf of Mexico, as well as announced and potential higher tariffs in the United States”, pointed out the World Bank. Leading indicators, however, signal "continued weakness in advanced-economy goods trade."
The latest estimates from the World Trade Organization indicate a 2.7% increase in world merchandise trade in 2024, after a 1.1% fall in 2023. The growth rate is expected to increase further in 2025 to reach 3%.
But here again, economists point out the fragile reliability of the forecasts. “Trade policy uncertainty has increased amid recent electoral outcomes and new trade policy announcements in several large economies, most notably in the United States. Globally, the number of new trade restricting policies introduced in 2024 was five times higher than the 2010-19 average and is close to the record high observed in 2023”, the World Bank notes. However, the institution also confirms an acceleration in the growth of world trade in 2025-2026, while warning that this increase will remain below the averages observed before the pandemic. The OECD states that China’s share of world trade is expected to further increase over the next two years.
The year 2024 confirmed the volatility of international transport prices, much greater than that of road transport prices.
Budget forecasting is definitely becoming a very random exercise. Traditional analysis based on the evolution of supply and demand must integrate increasingly complex risk management. "The results of our annual Allianz Risk Barometer reflect the uncertainty many companies around the globe are facing right now. What stands out this year is the interconnectivity of the top risks. Climate change, emerging technology, regulation and geopolitical risks are increasingly intertwined”, said Vanessa Maxwell, Chief Underwriting Officer at Allianz Commercial.
Supply Chain departments are at the heart of this complexity and play a more strategic role in companies than ever before. Knowing how to integrate holistic risk management into the design of logistics schemes becomes a key factor for competitiveness, and even business continuity. Diversification of supply sources, for example, is one of the most significant trends of recent years, and it is far from finished. The first weeks of 2025, particularly turbulent on the geopolitical level, promise a year full of twists and turns, against a backdrop of modest growth. Agility will make all the difference.
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