The World in 2025

Welcome to 2025! As usual, at the start of the year, there are a whole raft of predictions as to what will happen. I used to write my own personal predictions and review them at the end of the year but now, with so many predicting so many things, I’ll leave to the panel of experts I’ve gathered from around the world starting with the economy. What’s going to happen to the economy and markets this year?

Well, my favourite source for these ideas is the Economist’s yearbook: The World in 2025. What are they saying? Let’s start with the editor’s view from Tom Standage. His ten key 2025 things include the impact of Donald Trump becoming the US President and what that means for geopolitical tensions; a trade war between America and China; a massive rise in clean-tech – solar panels, electric vehicles, etc – that will benefit China; questions about the future of artificial intelligence (AI); the end of easy air travel; and more.

There’s a lot more detail on the Economist’s website but the key questions for 2025, according to them, are:

• What happens when the world’s biggest economy takes a sharp protectionist turn?
• When the global superpower decides that a transactional foreign policy beats alliances? and
• When the reset takes place as wars rage, menacing adversaries join forces and artificial intelligence (AI) is changing everything from health care to warfare?

But the Economist is not the only game in town. For example, I really like Ipsos's survey of people around the world. There is loads in this report, but a key takeaway as an economic pulse is the differing views of nations where Argentina (-26 percentage points) and Sweden (-12 percentage points) show considerably fewer people expecting higher inflation in 2025. Conversely, Hungary (+21 percentage points) and Poland (+16 percentage points) have seen a notable increase in the proportion of respondents anticipating higher inflation.

Who knows, but their report is well worth a read on all fronts.

Then, you could take a look at M&G’s views who ask, from an investor’s perspective, whether the markets are too optimistic. Their key takeaways for 2025 include the view that record-high government debt and rising borrowing costs are sparking concerns about the sustainability of government finances. Add to this that policymakers are prioritising economic growth but there are concerns that growth may not return to ‘normal’ levels and you can see that, in this uncertain context, an active approach is key for investors to identify opportunities and mitigate potential disappointments.

I guess they would say that ... but then you could look to Saxo Bank for some really outlandish predictions. Here are their top ones:

Trump 2.0 blows up the US dollar

As the new Trump administration turns the global financial system on its head with huge tariffs, the world scrambles to find alternatives to the dollar.

Nvidia balloons to twice the value of Apple

Armed with its revolutionary AI chips, could tech giant Nvidia grow to twice Apple's size and become the most profitable company of all time?

China unleashes CNY 50 trillion stimulus to reflate its economy

Having created history’s most epic debt bubble, China boldly bets that fiscal stimulus to the tune of trillions of CNY is the only answer.

First bio-printed human heart ushers in new era of longevity

It’s alive! Fusing bioengineering and medical science, scientists successfully bio-print a human heart, promising to extend the lives of millions.

Electrification boom ends OPEC

As electric vehicles become more affordable, could oil-rich OPEC become irrelevant in 2025 and find itself on the ash heap of history?

US imposes AI data centre tax as power prices run wild

With tech giants sucking up power supplies for their new AI data centres, utility bills skyrocket and an outraged public demands action.

A natural disaster bankrupts a large insurance company for the first time

After a year of wild weather in 2024, a catastrophic storm hits the US in 2025, sinking a large insurer that has underestimated climate change risks.

Sterling erases post-Brexit discount versus the euro

As Europe’s economy struggles, fresh fiscal policy winds are blowing in the UK, driving sterling back to levels versus the euro not seen since before Brexit.

The Economist builds on this and makes further implausible predictions for 2025, such as Russia deploying a nuclear explosion in space, major volcanic eruptions and finally finding some alien life forms. My favourite of their wild predictions is giving a bank account to animals.

“What if animals had their own pots of money, and could spend it in ways to promote conservation and biodiversity, increasing their chances of survival? That is the idea behind ‘interspecies money’, a concept being developed by Tehanu, a technology outfit. It has already launched a trial involving a family of 19 mountain gorillas in Rwanda, and in 2025 it hopes to extend this scheme to cover all gorillas in the country.”

Sounds like bananas to me …

… but then it made me think there could be something in this. What if we could give a bank account to our dog or cat? What would they do with it? I guess their bank statement would be food, toys, bedding, food, vet, manicure, toys, food.

Anyways, welcome to 2025. Tomorrow, I’ll look more closely at key business and work trends we can expect this year.