Outlook 2025: Jaron Krant (InsingerGilissen)
This article was originally written in Dutch. This is an English translation
By Jaron Krant, Investment strategist, InsingerGilissen
What are the economic prospects for the rest of 2025?
‘Despite the recent de-escalation in the trade war, we expect the average US import tariff to rise sharply in the end. In addition, it remains to be seen to what extent weak confidence indicators will translate into lower consumer spending and investment. We expect President Trump's trade policy and the uncertainty surrounding it to lead to lower economic growth and higher inflation in the US. However, we believe that a recession will be avoided, thanks in part to strong household and corporate balance sheets, tax cuts and the positive effects of deregulation. For other regions, such as Europe and Asia, we foresee a smaller impact on growth and inflation. Policymakers here have more scope to support the economy with monetary easing and fiscal stimulus measures.
Where are the biggest opportunities and threats for investors?
Against this backdrop, we believe that stock markets outside the US, such as those in the eurozone and Japan, are relatively attractively valued. Increased investment in infrastructure and defence, as well as interest rate cuts by the ECB, are providing important support for European stock markets. The weakening of the US dollar that we foresee offers upside potential for the yen. Corporate reforms in Japan are also improving profitability. In addition to a US recession, we see a sharp rise in US bond yields as one of the main risks for investors. Concerns about rising US government debt, high budget deficits and persistent inflation could push up US bond yields. This would put pressure on equity and bond markets across the board.
Trump's trade policy and the uncertainty surrounding it will lead to lower economic growth and higher inflation in the US.
