The Real Economy: January 2025

Global economic outlook for 2025

The global economy will expand at a solid if unspectacular pace of 2.5% in 2025, driven by strength in India, emerging market economies and the United States, RSM US Chief Economist Joe Brusuelas writes in the January issue of The Real Economy.

Leading the way among emerging economies will be India, for which Brusuelas forecasts a growth rate of 3.5% to 4%. But developed economies like those in Europe will lag, he adds, growing at a rate of 1.25% to 1.75%. The U.S. economy will continue to outperform other developed economies, though the prospect of higher tariffs has added a measure of uncertainty to the outlook.

A big factor in the global economic picture is the strong U.S. dollar, which has helped drive capital and investments in the U.S. economy. But the strong dollar has also posed a challenge for emerging economies because of the rising cost of dollar-denominated external debt, Brusuelas writes.

The bigger picture for the global economy is aimed at solid growth, driven by a rebalancing of labor markets, easing inflation and lower interest rates.
Joe Brusuelas, Chief Economist, RSM US LLP

Finally, we offer guidance for middle market businesses on how to prepare for the likelihood of higher tariffs. Businesses that act now will be in the best position to thrive.

We look at these topics and more in this issue of The Real Economy.

Inside the January issue:

Perspective
Global economic outlook for 2025: Modest growth amid trade tensions
Global growth in 2025 will expand at a modest 2.5% pace as the sluggish recovery from the pandemic continues, according to our forecast.

Perspective
To contend with higher tariffs, businesses need to act now
With higher tariffs likely under the incoming Trump administration, businesses are already making decisions in a way that will affect economic growth and reshape the global economy.
Article
How consumer businesses can prepare for higher tariffs
As consumer products companies look to a new Trump administration, higher tariffs are most likely on the way. Businesses that prepare now, even as they wait for the tariffs to take shape, will be better positioned to maximize their margins.
Perspective
Identifying countries at risk as the dollar surges
Over the past year the real trade-weighted dollar index has appreciated 6.88% because of a combination of interest rate differentials, strong growth and expectations of reduced regulation, lower taxes and increased government spending.

RSM contributors

The Real Economy Livestream series

Post-election economic outlook: Trends and insights for middle market businesses

Join RSM US Chief Economist Joe Brusuelas and U.S. Chamber of Commerce Executive Vice President Neil Bradley as they discuss the economic outlook in a post-election climate.

Recorded Wednesday, December 4, 2024

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Timely economic analysis and trends to help middle market businesses succeed

Special Report

The RSM Middle Market Sustainability Survey 2024: US and Canada

Numerous regulations are making sustainability a larger compliance issue.

Tax incentives are one part of companies’ broader decarbonization efforts.

Training is the most common action taken toward compliance, but also the top hurdle.

Also from The Real Economy

Monthly economic analysis report for the US middle market
Perspective
Global economic outlook for 2025: Modest growth amid trade tensions
Global growth in 2025 will expand at a modest 2.5% pace as the sluggish recovery from the pandemic continues, according to our forecast.
Perspective
To contend with higher tariffs, businesses need to act now
With higher tariffs likely under the incoming Trump administration, businesses are already making decisions in a way that will affect economic growth and reshape the global economy.
Perspective
Identifying countries at risk as the dollar surges
Over the past year the real trade-weighted dollar index has appreciated 6.88% because of a combination of interest rate differentials, strong growth and expectations of reduced regulation, lower taxes and increased government spending.
Perspective
The U.S. economic year ahead
Since the American economy emerged from the shocks of the pandemic, we have made the case that it is undergoing a fundamental structural change.
Perspective
A nascent dollar bloc: Reglobalization amid U.S.-China tensions
The fragmenting of free trade and the rise of industrial policy have resulted in the nascent formation of a trade, finance and currency bloc organized around American economic and security interests.
Perspective
When money has a price: How the higher cost of capital is affecting America’s real economy
The era of easy money has ended, replaced by a higher cost of financing for businesses.

The Real Economy Blog

The Real Economy Blog was developed to provide timely economic insights about the middle market economy. It is offered as a complement to RSM’s macroeconomic thought leadership, including The Real Economy monthly publication and the proprietary RSM US Middle Market Business Index (MMBI).

The voice of the middle market

Middle market organizations, which make up the “real economy,” are too big to be small and too small to be big. They have distinct challenges and opportunities around resources, labor, technology, innovation, regulation and more.

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