Amundi's 2025 Investment Outlook presents a nuanced view of the global economy, forecasting a softening growth rate of 3.0% for 2025 and 2026. Emerging Markets (EM) are expected to lead with a growth rate of 3.9%, while Developed Markets (DM) are projected to grow at a slower pace of 1.6%. The US economy is anticipated to experience a mild deceleration towards a soft landing, with Europe’s recovery remaining modest. Despite a slowdown in China, Asia continues to be a significant growth driver in the global landscape. The report projects terminal interest rates to stabilize at 3.5% in the US, 2.25% in the Eurozone, and 3.50% in the UK by the end of 2025. Vincent Mortier, Chief Investment Officer at Amundi, emphasizes the importance of seizing opportunities in risk assets, while Monica Defend, Global Head of Multi-Asset at Amundi, highlights the need to identify investment opportunities amid ongoing geopolitical shifts.
The investment implications suggest a mildly pro-risk stance, balanced with assets that are resilient to inflation. Key themes emerging from the outlook include the potential for income gains in credit markets, broadening equity exposure beyond US mega-cap stocks, and focusing on high-yield opportunities in Emerging Markets, particularly in India and Indonesia. This perspective aligns with the recent trends of increased investment flows into emerging markets, as seen with nearly $40 billion flowing into China equity funds in early October 2024, and a notable rise in Ecuador's dollar bonds following positive developments with the International Monetary Fund (IMF).
As investors navigate the evolving landscape, the outlook underscores the dual nature of opportunities and risks present in emerging markets, particularly as the Federal Reserve is expected to implement rate cuts that could further enhance the attractiveness of emerging-market bonds. This comprehensive view from Amundi serves as a guide for investors looking to capitalize on the anticipated shifts in the global economy while remaining cautious of potential downturns. [21c7f3c5] [7a22fdad] [3611b8a1] [e8afd76d] [9fb77498] [75f2e2e5]