Economic forecasts for 2025 in the US, European Union, China and Russia

According to the most prestigious analyses of the economic programs of the most powerful countries in the world, we have summarized several key aspects that are important for understanding the trends and priorities of economic development at the global level:

Diversification of the economy and the development of new sectors. Powerful economic countries have implemented strategies that include diversifying income sources, investing in new sectors such as technology, renewable energy and biotechnology, to ensure sustainable development and reduce dependence on traditional resources.

Innovation and investment in research and development (R&D). A full focus on innovation and scientific research has helped these countries remain at the forefront of global development. These investments are vital for increasing competitiveness, creating new jobs and developing advanced products and services.

Improving infrastructure and digitalization. Increasing investment in infrastructure and digitalization has been a key aspect for economic development. The speed and efficiency of transportation, energy, and communication have contributed to strengthening the position of these countries in global markets.

Fiscal policies and macroeconomic stability. Fiscal policies aimed at balancing the budget, reducing public debt, and supporting key economic sectors are essential for maintaining the stability and credibility of strong economies. These countries have also invested in improving public services and infrastructure to increase the quality of life for their citizens.

Addressing global challenges and international cooperation. The most powerful countries have created mechanisms to address global challenges, such as climate change, pandemics, and economic crises, including international cooperation and the creation of trade agreements and sustainable global strategies.

Inclusion of marginalized groups and social equality. While many powerful countries have developed policies that support the inclusion of marginalized groups, ensuring equal opportunities for all citizens, including women, minorities, and peoples living in difficult conditions.

In a more analytical description, we present the approaches for each of the countries as follows:

The US economic programs for 2025 focus on a combination of fiscal discipline, targeted investments in key areas, and support for vulnerable populations. The President’s budget proposals emphasize deficit reduction while expanding key social programs, with an overall goal of promoting long-term economic stability.

For the US, economic growth is expected to remain relatively slow but steady. Analysts predict moderate GDP growth, with consumer spending expected to weaken slightly. However, a strong labor market and moderate household debt will provide support, avoiding a technical recession.

The US economy is projected to see a steady recovery, with falling inflation and interest rates set to decline, although they will remain higher than pre-pandemic levels.

The budget aims to reduce deficits by $3.3 trillion by 2034, largely by balancing spending increases with tax reform and revenue-generating measures. The overall deficit is expected to decline slightly through 2034, with spending remaining high, particularly for Social Security, Medicare, and interest payments.

The budget includes historic investments in small businesses, particularly through SBA programs designed to provide over $58 billion in business loans. There is also a focus on building a diverse STEM workforce through $1.4 billion dedicated to increasing participation among underrepresented groups.

Key investments include expanding support for affordable housing, reducing homelessness, and providing additional funding for tribal communities. Over $4 billion will be allocated for homeless assistance, and further investments are planned for the Department of the Interior’s tribal programs. Investments include expanding Affordable Care Act subsidies, introducing paid family and medical leave, and expanding access to free community college. These efforts are accompanied by increased funding for education, particularly for historically underfunded institutions.

While there is a focus on curbing deficit growth, the overall U.S. federal debt is projected to continue to grow, with a slight slowdown expected in the coming years. Major fiscal reforms, particularly in tax policy, will help finance these expanded initiatives.

These programs illustrate a focus on both economic growth and addressing social needs, with a mix of short-term relief and long-term structural reforms aimed at reducing fiscal pressure while expanding access to services and opportunities for marginalized communities.

The European Union’s economic programmes for 2025 will focus on strengthening resilience, fostering the green and digital transitions, and responding to geopolitical and structural challenges. The proposed EU budget for 2025 includes significant investments in these areas, with an emphasis on renewable energy, digital infrastructure and sustainable agriculture. These efforts are designed to boost Europe’s long-term economic growth while reducing its dependence on fossil fuels.

The EU Recovery and Resilience Facility (RRF) remains an essential tool, as the deadlines for using the allocated funds approach. In 2025, EU Member States are expected to accelerate their projects, particularly in infrastructure, green technologies and digital innovation.

Cohesion policy will also continue to support economic development, particularly in regions affected by ongoing geopolitical tensions, including the war in Ukraine.

In addition, the 2025 budget allocates €49.2 billion for research and innovation, including €12.7 billion for Horizon Europe, which aims to keep the EU at the forefront of technological advances. The focus on education and health, with significant funding for the Erasmus+ programme and the EU4Health initiative, also underlines the EU’s long-term commitment to improving the quality of life across the bloc. These initiatives will be complemented by targeted financial assistance to support Ukraine, migration management and the expansion of the EU’s defence capabilities in response to security concerns.

In 2025, the influence of powerful countries such as Germany, France, England, Italy and Spain is expected to be significant in many aspects of global economic and political development. Some of the key factors that could influence this include:

Germany, as the most powerful economy in the European Union (EU), Germany will play a key role in the region’s economic and trade policies. Its focus on advanced industry, technology and renewable energy could influence sustainable development standards. It is also possible that Germany will continue to be a leader in environmental policies and digitalization, helping to strengthen the EU’s position in the global market.
France, as one of the EU’s economic leaders, France will continue to help guide European Union policies, particularly in sectors such as renewable energy, environmental protection and digital innovation. France is expected to strive to balance the need for economic growth with its commitments to sustainable development, while having a major influence on international policies such as climate change and defense policies.
United Kingdom. After Brexit, UK has announced ambitions to increase its influence in global markets, seeking new trade agreements and strategies to increase investment in technology and finance. The UK is expected to focus on developing the technology, finance and services sectors, and to support policies that favour sustainable growth, particularly in the context of increasing global political and economic uncertainty.
Italy, has a diversified economy and a strong tourism sector, which is expected to contribute to its economic growth. However, demographic challenges and public debt could affect economic stability. Its impact on the EU will also include policies for infrastructure development and support for new sectors such as clean energy and digitalisation.
Spain, with a growing economy, it will continue to contribute to the EU’s economic growth, particularly through investment in tourism, assistance for the development of other regions and employment policies. Spain is expected to continue to focus its energies on supporting innovation and being a key partner in developing a sustainable and direct economy for the future.

Overall, these countries will play an important role in economic policy and global development, contributing to increased sustainability and technological development at the global level.

Overall, 2025 will be a key year for the EU as it continues to navigate immediate economic challenges while preparing for the next long-term financial cycle starting in 2028.

In Russia, the economic outlook is more secure. The IMF recently lowered its GDP growth forecast for Russia in 2025, reflecting the effects of its weak government spending coupled with a war of words about investment. The World Bank has a modest outlook for 2025, citing economic challenges stemming from sanctions and tensions that are doing the opposite.

Moreover, inflation in Russia will remain high, driven by debt deleveraging and geopolitics.

Russia’s 2025 strategy is centered around a few key objectives, most notably managing the balance between the economy and the economy amid other sanctions. The 2025 budget calls for a 12% increase in general government revenues to 40.3 trillion rubles, driven by growth in non-oil and gas revenues. This includes higher taxes, lower VAT, and increased taxes on gasoline, alcohol, cigarettes, and sugary drinks. While oil and gas revenues are falling due to lower global prices, Russia is diversifying its revenue base, with rising corporate taxes and vehicle price levies contributing to social spending.

Military spending remains a key focus, accounting for a significant portion of the budget, which is against the backdrop of a small budget deficit. However, the cost of financing the spending, given high interest rates and the limited external borrowing options due to sanctions, remains a challenge.

A key part of the strategy is the expansion of Russia’s National Wealth Fund, which is facing a large increase in its depletion.

The labor market is facing limited restrictions, with a growing labor shortage due to the war, which is affecting industrial sectors such as construction and manufacturing.

This demographic shift, combined with high inflation and a tight labor market, is straining Russia’s economic model.

Overall, Russia in 2025 will face moderate growth, but it will be affected by the war in the economy and its impacts as in such a country are also in the trade war. Russia may face a stable economic environment in 2025, but this trend remains to be verified over the next year due to geopolitical dynamics and the country’s fiscal performance.

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Next year, China aims to make efforts to implement more proactive and influential macro policies, expand domestic demand, promote the integrated development of scientific and technological innovation and industrial innovation, stabilize the real estate and stock markets, prevent and resolve risks in key areas and external to stabilize expectations and stimulate vitality.

Increasing the intensity of China’s proactive fiscal policy will require better coordination of fiscal resources and a combination of policy instruments, including deficits, special-purpose bonds, special long-term government bonds, preferential tax and tariff policies, and government subsidies to maintain an appropriate level of spending.

Improving the quality and effectiveness of proactive fiscal policy will require fiscal management based on the rule of law, sound practices and standard procedures, and efforts to provide better value for money through policy synergy.

To ensure a consistently strong and more impactful fiscal policy, China will set a higher deficit-to-GDP ratio, strengthen the intensity of fiscal spending, increase the issuance of special ultra-long-term treasury bills and special local government bonds, and optimize the structure of fiscal spending

China’s policy approach strives for an optimized mix of sustainable growth, sustainable employment, and reasonable price recovery, all done in a swift and effective manner with sufficient intensity.

The implementation of regional strategies will be strengthened to enhance the vitality of regional development, the meeting said, calling for actively promoting new growth poles, as well as enhancing the innovative capabilities of areas with economic development advantages and giving better play to their leading development role.

In summary of the above comments for 2025, we believe that:

The economic and financial forecasts for the US, the EU, Russia and China reflect their different priorities and challenges.

The US is focusing on fiscal responsibility, aiming to reduce its deficit by expanding key social and infrastructure programs. Investments in green energy, healthcare, and education are expected, with a focus on addressing long-term economic growth through innovation and productivity. The federal government also plans to tackle inflation, lower interest rates, and improve job creation while managing a rising national debt. Key programs include the continued implementation of the Recovery Act, with a push for more digital and green investments.

The EU budget emphasizes the green and digital transition, with significant investments in renewable energy, digital infrastructure, and sustainable agriculture. Key funding instruments include the Recovery and Resilience Facility (RRF), which aims to foster economic resilience and digital transformation, and Cohesion Policy, which supports regions affected by economic and geopolitical challenges. The EU is also investing heavily in research, innovation and social programmes such as healthcare and education. In addition, significant financial support for Ukraine, defence and migration management is foreseen.

Russia’s budget is shaped by military spending and the need to cushion the impact of sanctions. The government is focusing on maintaining stable revenues from non-oil and gas sectors, while managing inflation and labour shortages. However, its defence spending remains high and there are concerns about the depletion of the National Wealth Fund. Investments in digital infrastructure and agriculture are planned, but the geopolitical context, including the war in Ukraine, continues to be a major factor in shaping fiscal priorities.

China’s economic focus will be on high-tech industries and domestic consumption. The government aims to stimulate growth by boosting manufacturing, advancing technological innovation and strengthening the digital economy. The Chinese leadership is also prioritizing green initiatives, particularly in renewable energy and electric vehicles. As the country seeks to improve its global competitiveness, it faces challenges from the property sector and demographic changes, leading to a cautious approach to fiscal policy. China’s fiscal stance is likely to support state-owned enterprises and infrastructure development, with an emphasis on achieving self-sufficiency in critical technologies.

Each of these economies is focused on balancing domestic investment, international positioning, and long-term growth while managing the effects of inflation, geopolitics, and demographic change.