20 Predictions for 2025
20 Predictions for 2025 From ISA
Entering 2024, it was apparent that this would be a year dominated by politics and technology, with half of the world’s adult population voting in 2024 and with the rapid spread of artificial intelligence. As such, many of the events 2024 came as no surprise.
As we enter 2025, there are some changes forthcoming that are relatively easy to forecast, such as major political and security changes in the United States and around the world. On the economic front, there is more uncertainty in many of the world’s leading economies.
As one of the world's leading providers of economic and geopolitical forecasts, International Strategic Analysis (www.isa-world.com) has been making annual predictions for its clients around the world more than two decades. As such, here are 20 predictions for the coming year.
Politics and Security in 2025
Trump Starts Fast: Donald Trump will return to White House in early 2025 much more prepared than he was in 2017 and as a result, he will be able to enact significant policy changes immediately upon taking office. However, questions about his advanced age and his interest in such a demanding job will begin to surface by the latter part of the year.
The Democrats in Disarray: With the Republicans firmly in charge in 2025, the Democrats will be in a state of disarray. This coming year will be dominated by the crucial decision to either move the party to the political center, or to double down on a more left-leaning agenda.
Borders Get Tighter: Traveling (or migrating) between countries will grow more difficult in 2025 as the United States and other countries take steps to reduce the flow of migrants across their borders. This will make trade and travel more difficult and more costly, but may not do very much to slow the pace of migration.
Incumbents Continue to Struggle: Popular anger over rising living costs and widening wealth disparities will continue to cost incumbent leaders and governments at the ballot box, as it did in many of 2024’s most important elections. Governments in Germany, Canada and Australia all face challenging re-election bids in 2025.
Disorder Amid Increasing US Isolationism: The instincts of many in the Trump Administration call for increasing isolationism in the United States. However, growing international disorder and the continued threat posed by China will force the US to remain engaged in many areas of the world in 2025.
The War in Ukraine Ends: Facing shortages of manpower and weapons, as well as a less support from the United States, Ukraine will reluctantly agree to a ceasefire in 2025. If a permanent peace deal is reached, it will almost certainly include the loss of territory to Russia.
US Allies Rearm: Despite their economic troubles, US allies in Europe and East Asia will continue to significantly increase their defense spending in the face of growing threats from Russia, China and other revisionist powers and by fears of increasing isolationism in the United States.
Business and Economics in 2025
Global Economic Growth Slows Slightly: Thanks largely to the robust US economy, the global economy has performed better than expected in recent years. In 2025, global economic growth will slow slightly, as key economies such as China, Europe and Japan continue to suffer severe disruptions. Overall, the global economy will grow by 3.1% in 2025.
The US Economy Remains Strong: Economic growth in the United States is forecast to slow slightly from an estimated 2.9% in 2024 to 2.7% in 2025. Growth will remain relatively strong thanks to the tech and energy sectors. However, there are growing concerns about the ability of US consumers and the tech sector to continue driving growth.
China’s Economic Slowdown: China’s economy has been plagued by the weakness of its domestic market in recent years. This weakness will continue in 2025, despite more economic stimulus measures enacted by Beijing. Economic growth in China will slow from an estimated 4.7% in 2024 to 4.4% in 2025.
Europe’s Economy Falls Further Behind: Europe’s economic struggles have stood in stark contrast to the strength of the US economy and this gap will widen further as Europe’s economic competitiveness continues to wane. In 2025, the European Union’s economy is forecast to grow by just 0.8%, the same as in 2024.
Global Trade Tensions Worsen: The Trump Administration will impose new tariffs on imports from China, although it will refrain from placing too large of tariffs on imports from Canada and Mexico, as these countries are needed if the US is to accelerate the process of reshoring. Nevertheless, global trade tensions will rise significantly.
Inflation Persists in Early 2025: Rising tariffs and labor shortages will result in inflationary pressures remaining relatively high in the first part of 2025, resulting in more cautious interest rate cuts in early 2025. However, by the latter part of 2025, inflation rates will begin to fall again. Meanwhile, in China and parts of Europe, deflation will return as a significant threat.
AI’s Impact on Jobs: While the impact of artificial intelligence on the economy has thus far been limited, its impact on the job market will become ever more pronounced in 2025. On one hand, an increasing number of jobs will be replaced by AI, while companies step up their adoption of AI. Watch for AI agents to be the next big thing in this sector.
Other Predictions for 2025
Birth Rates Keep Falling: Birth rates in most of the world will continue to decline in 2025, including in the United States. While this should have a positive impact on the environment, it has the potential to have major negative repercussions for the economy.
The World Will Look Much Different: Falling birth rates and large-scale migration are changing the way that our population looks and thinks. For example, the world’s population is growing older, leading to great strains on public finances. At the same time, the appearance and the attitudes of our population will both continue to change.
Social Divisions Will Remain: Politics today is dominated by massive social divisions across our country and across much of the world. These divisions will grow wider in 2025, even as there is a growing backlash against the most conservative and the most progressive social platforms.
DEI Rollback Continues: After massive growth in previous years, businesses and other organizations will continue to rollback more DEI (diversity, equity and inclusion) initiatives in 2025. This is due in part to fears that such initiatives are alienating conservative customers, while others have questioned the business and social impact of these initiatives.
A Backlash Against Sustainability: Even as the evidence mounts of the grave dangers posed by the planet’s changing climate, the backlash against sustainability that has played a major role in elections around the world in recent years will gain momentum. This will lead to more governments rolling back some of their more ambitious sustainability goals.
Energy Concerns: Concerns of energy supplies will rise significantly in 2025 as many areas of the world suffer from worsening energy shortages. Moreover, growing demand for energy from the tech sector will put strains on energy supplies in leading economies, even where energy supplies are relatively plentiful.