U.S. 2025 Outlook: Growth Predictions, IMF Upgrades, And WEF's Tech For Financial Equity

The U.S. economy in 2025 is set to face a dynamic landscape shaped by evolving market trends, revised growth forecasts, and transformative technological advancements. 安永 's leading chief economist outlines three key predictions for the nation's economic trajectory, emphasizing potential opportunities and challenges ahead.

Meanwhile, the International Monetary Fund (IMF) has raised its growth estimates for the U.S., signaling resilience amidst global uncertainties.

At the same time, World Economic Forum predicts that emerging technologies offer innovative pathways to bridge financial inequities on a global scale, redefining access and inclusion in markets worldwide.

3 Predictions For The U.S. Economy In 2025, According To A Chief Economist

As 2025 unfolds, the U.S. economy is set to navigate a landscape shaped by growth, disruption, and evolving labor market dynamics. Gregory Daco, EY’s chief economist, recently shared his key predictions for the year ahead, offering insights into how factors like income growth, monetary policy, and labor demand may define the economic trajectory.

Daco's anticipations for the U.S. economy in 2025

1. The U.S. Will Be the Global Growth Leader — and Disruptor

Daco projects that the U.S. will continue to lead the global economy in 2025, fueled by income growth, productivity gains, and easing monetary policy. As the world’s largest economy, the U.S. remains a critical driver of global activity. Pro-business policies, including tax cuts and deregulation, are expected to bolster economic expansion, with ripple effects benefiting other economies reliant on U.S. performance.

However, the U.S. is also positioned to act as a major disruptor. A September KPMG survey revealed that 70% of U.S. business leaders are concerned about market disruptions impacting growth. Factors like inflationary pressures or abrupt policy shifts could pose challenges, potentially slowing growth and creating global economic headwinds.

2. Federal Rate Cuts Will Slow Down

In 2024, the Federal Reserve Board implemented three rate cuts, bringing the federal funds rate to a range of 4.25% to 4.5%. While this provided some relief, Daco predicts that the pace of rate cuts will slow in 2025 due to concerns about inflation. Potential tariff implementations could raise the cost of imported goods, driving prices higher.

“Fed policymakers are likely to adopt a more gradual approach to monetary easing,” Daco noted. He forecasts a total rate reduction of 0.75% this year, implemented in three increments of 0.25% at every other meeting in March, June, and September. This measured strategy aims to balance economic growth with inflation risks.

3. The Unemployment Rate Will Rise

After maintaining a steady unemployment rate of 4.1% to 4.2% in the latter half of 2024, Daco anticipates a modest increase in 2025. He predicts the rate will climb above 4.5%, driven by weaker labor demand. Businesses are exercising greater caution in hiring, leading to slower job growth.

“Employers are becoming more selective about who they hire, how much they hire, and at what salary,” Daco explained. This trend is evident in the decline of the hiring rate to a 10-year low. The U.S. economy is expected to add between 75,000 and 100,000 jobs per month in 2025, a significant decrease from the 2024 average of 186,000 jobs per month.

A Mixed Economic Landscape

Despite challenges like rising unemployment and slower rate cuts, the overall outlook for the U.S. economy in 2025 remains optimistic. With strong income and productivity growth, coupled with supportive policies, the U.S. is well-positioned to lead global economic activity while navigating potential disruptions. As businesses and policymakers adapt to these evolving dynamics, the year ahead promises to be one of resilience and transformation for the U.S. economy.

https://www.entrepreneur.com/business-news/predictions-for-the-us-economy-in-2025-ey-chief-economist/485414

IMF Raises U.S. Growth Estimates

The International Monetary Fund (IMF) has revised its projections for the global economy in 2025, highlighting the U.S. as a standout performer among advanced economies. This adjustment reflects the nation's robust recovery from the pandemic and its resilience against inflationary pressures.

U.S. Growth Outpaces Western Peers

The IMF now estimates that the U.S. economy will grow by 2.7% in 2025, an increase from its previous forecast of 2.2% made in October. This contrasts sharply with downgraded projections for major European economies such as Germany, France, and Italy, as well as Canada.

Key drivers of the U.S.’s exceptional performance include strong productivity growth, a resilient labor market, and effective monetary policies from the Federal Reserve. In 2024, the U.S. economy expanded by 2.8%, building on a 2.9% growth rate in 2023—far outpacing the eurozone's estimated 0.8% growth for 2024.

Falling Inflation Supports Growth

U.S. inflation has significantly eased, dropping from a peak annual rate of around 9% in 2022 to below 3% by the end of 2024. This decline has bolstered consumer confidence and spending, further fueling economic growth. Meanwhile, major European economies are grappling with challenges such as energy crises, driven by geopolitical tensions, and increased competition from Chinese imports.

Global Implications of U.S. Economic Strength

Pierre-Olivier Gourinchas, the IMF’s chief economist, noted that the divergence between the U.S. and its Western counterparts could represent a structural shift rather than a temporary fluctuation. He cited the U.S.’s advanced tech sector, sophisticated financial markets, and higher returns on investment as factors cementing its leadership position. This dynamic, Gourinchas explained, results in increased capital inflows, a stronger dollar, and rising living standards in the U.S. compared to other advanced economies.

Challenges Facing Europe and Canada

European countries such as Germany and France continue to contend with high energy costs, labor market disruptions, and weakening industrial output, particularly in the automotive sector. Similarly, Canada has faced headwinds from lower natural gas prices and a relatively weaker labor market. In 2024, Canada’s economy grew by an estimated 1.3%, highlighting its struggles to keep pace with the U.S.

Broader Global Economic Outlook

Globally, the IMF expects inflation-adjusted growth to stabilize at 3.3% in 2025 and 2026. Inflation is projected to decrease from 5.7% in 2024 to 4.2% in 2025, with further declines anticipated in subsequent years. This moderation could enable central banks worldwide to lower interest rates, helping to restore economic equilibrium.

China’s Economic Prospects

China’s growth is expected to align with other emerging markets at 4.6% in 2025. However, the IMF cautioned that insufficient fiscal and monetary support could lead to deflationary risks in the world’s second-largest economy.

Uncertainties Ahead

While the IMF’s projections are optimistic, they hinge on policy decisions by the incoming U.S. administration. President-elect Donald Trump’s promises of tax cuts, deregulation, and other pro-business measures could either amplify or disrupt current trends, depending on their implementation.

Conclusion

The IMF’s revised estimates underline the U.S.’ pivotal role in driving global economic recovery. As inflation cools and structural advantages become more pronounced, the U.S. is poised to consolidate its leadership position among advanced economies in 2025. However, regional disparities and geopolitical uncertainties continue to pose challenges, highlighting the interconnected nature of today’s global economy.

https://www.wsj.com/economy/u-s-growth-projections-revised-up-by-the-imf-74925a12?mod=global_news_article_pos1

Driving Global Financial Equity: The Role Of Technology In Shaping Economic Futures by World Economic Forum (WEF)

According to the World Economic Forum , in today’s interconnected economic environment, the challenge of achieving global financial equity remains one of the most pressing issues. The emergence of digital technology presents an unprecedented opportunity to address this disparity by providing access to financial tools that were once inaccessible to billions worldwide.

As the world moves toward a more interconnected, digital-first future, the importance of having access to basic financial services cannot be overstated. Approximately 1.4 billion adults remain unbanked, meaning they do not have access to any formal financial institutions. This exclusion severely limits opportunities for individuals, from the inability to save, invest, or access credit, to the challenges of paying bills, receiving payments, and managing financial emergencies. However, advancements in technology are beginning to break down these barriers and offer pathways to financial inclusion.

The advent of mobile money, digital banking, and innovative fintech platforms has transformed global finance. As of 2023, over 6.7 billion smartphones were in use globally—roughly 69% of the world's population. These devices have become powerful financial tools, enabling people to manage their finances, make payments, and access credit with ease. According to the The World Bank, technological progress has already helped 1.2 billion previously unbanked adults gain access to financial services over the past decade, particularly in regions such as Sub-Saharan Africa, South Asia, East Asia, and Asia Pacific.

A Case for Innovation: Kenya's M-PESA

One of the most notable success stories of digital finance is Kenya’s M-PESA Africa, a mobile money service that has revolutionized financial inclusion in the country. M-PESA allows users to send and receive money, pay bills, and even access loans directly through their mobile phones, without the need for a traditional bank account. This mobile-first solution has empowered millions of Kenyans, especially in rural areas, to access financial services that were previously out of reach.

A 2016 study by Massachusetts Institute of Technology found that M-PESA had lifted 194,000 households out of poverty over six years. The service has enabled greater consumption, savings, and access to government payments, effectively transforming the economic stability of many individuals and families. M-PESA’s success indicates the powerful role that technology can play in alleviating poverty and fostering financial independence, not just in Kenya, but globally.

Closing the Financial Gender Gap: Tala's Impact

Technology also plays a pivotal role in narrowing the gender gap in financial services, particularly in emerging markets. Tala, a global fintech company, has developed a platform that assesses creditworthiness through alternative data and provides microloans to underserved populations in countries like Mexico, India, and the Philippines. In markets where women often face significant barriers to accessing formal financial services, Tala has made strides in promoting financial inclusion.

In Mexico, for example, only 62% of women have access to formal financial services. Yet, Tala’s lending portfolio includes 50% women, ensuring that more women can access credit, build financial independence, and contribute to their communities’ economic growth. This focus on gender-inclusive financial services is a powerful demonstration of how technology can drive social change and create more equitable financial opportunities.

Real-Time Payments: Bridging Gaps in the U.S.

In developed economies, technology is also addressing critical financial needs, particularly for underserved populations. In the United States, millions of Americans live paycheck to paycheck, with 27% of adults reporting they have no emergency savings. The introduction of Real-Time Payments (RTP) technology has significantly impacted the financial security of vulnerable communities, enabling the immediate transfer of funds from employers to employees in real time.

Real-time wage access platforms are especially important for hourly workers and those without access to traditional credit or savings. These tools help individuals meet their financial obligations, pay bills on time, and avoid financial stress during emergencies. For many workers, this technology is a lifeline that can make the difference between economic stability and insecurity.

The Road Ahead

While progress has been made, there is still much work to be done. The World Bank estimates that 720 million people—9% of the global population—continue to live in poverty. Financial tools must become more accessible, affordable, and reliable for all. The promise of digital technology offers a clear path forward, where innovation can bridge the gap between the financially excluded and the broader economy.

As we look to the future, the continued advancement of fintech, mobile payments, and real-time financial systems holds the key to fostering greater global financial equity. Governments, financial institutions, and tech companies must work together to create inclusive financial ecosystems that empower individuals, especially those in underserved regions, to achieve greater economic mobility.

The challenge is clear, but the potential for technology to drive positive change in global finance is immense. By ensuring that financial tools are truly accessible to all, we can lay the foundation for a more equitable and prosperous world.

https://www.weforum.org/stories/2025/01/financial-equity-through-technology/

Conclusion

The outlook for the U.S. economy and global markets in 2025 presents both opportunities and challenges. The U.S. is poised to maintain its position as a global growth leader, driven by robust income growth, productivity advancements, and favorable monetary policies. However, potential disruptions such as inflationary pressures, policy shifts, and rising unemployment may test the resilience of its economic trajectory.

Globally, the rise of emerging technologies plays a pivotal role in advancing financial equity, offering new pathways to bridge gaps in access to services. Innovations in mobile money, real-time payments, and digital banking are reshaping the financial landscape, especially for underserved populations in both developed and developing economies. As technological advancements continue to break down barriers to financial inclusion, they hold the potential to foster greater economic mobility and stability across the globe.

A transformative year ahead, with the U.S. economy leading the charge while digital innovations work to create a more inclusive global financial system. The path forward hinges on how businesses, policymakers, and individuals adapt to these shifting dynamics, ultimately shaping a more resilient and equitable economic future.

Sources: Entrepreneur.com Wsj.com Weforum.org

EY KPMG Federal Reserve Board International Monetary Fund The World Bank M-PESA Africa Tala Massachusetts Institute of Technology The Wall Street Journal World Economic Forum

#USEconomy #GlobalGrowth #US #Leadership #Technology #Innovation #FinancialInclusion #EconomicResilience #Income #Growth #MonetaryPolicy #DisruptiveTechnologies #USMarket #IMF #EconomicForecast #TechForEquity #FinancialEquity #MobileBanking #DigitalPayments #Fintech #GlobalFinancialInclusion #RealTimePayments #Payments #EconomicMobility #InclusiveFinance #USGrowth #Productivity #GlobalEconomy #LaborMarket #AI #ArtificialIntelligence #Economy #InterestRates #Unemployment #EconomicForecasts #Inflation #EconomicOpportunities #TechDrivenGrowth #FinancialSecurity #TechAndFinance #TechForGood #DigitalTransformation #FinancialTech #FutureOfFinance #EY #KPMG

?--------------------------------------------------------------------

Found value in my BOARDS Newsletters series? I invite you to:

?? "Connect" and “Follow” me on LinkedIn

?? Hit the “Like” icon on my editions

?? "Subscribe" to my ???????????????????? ?????????????? & ?????????????? ??????????, a category of ???????????? ???????????????????????????? ????????????????

?? For our collective learning, add your valuable “Comments” below

?? and "Repost" to your network

?? Hit the “Bell” icon on my Profile to get notified of my Newsletters