Will the Economy Continue Its Growth in 2025? | Global News Avenue

Forecasters believe the U.S. economy is likely to continue growing steadily into 2025, while the likelihood of a recession has declined in recent months.

The U.S. economy has expanded every year since the outbreak began, and forecasters expect growth to continue, albeit at a slower pace than in recent years. Gross domestic product, a measure widely used by the Bureau of Economic Analysis, is likely to grow at an annual rate of 1.9% through the fourth quarter of 2025, according to a November Fed survey of economists.

These economists project a 22.4% chance of negative quarterly growth by the third quarter of 2025, down from 25% in the previous round of quarterly surveys. Goldman Sachs economists said in their November outlook that strong consumer spending and a resilient labor force will continue to support the economy in the coming year.

As the United States reopens from the epidemic and an outbreak of high inflation strains household budgets, experts are increasingly confident that the United States will achieve a “soft landing” rarely seen in history.

Federal Reserve’s interest rate hike movement It aims to cool inflation by raising various borrowing costs starting in 2022, but doing so could throw the economy into disarray and trigger a wave of layoffs. Many economists predict that 2022 and 2023 Recession is comingwhich typically occurs after inflationary and disinflationary interest rate hike cycles.

Instead, inflation has fallen almost back to pre-pandemic levels, while the job market remains resilient. The economy continued to grow, so much so that the Federal Reserve began cutting interest rates again.

If the growth rate is in line with the 1.9% forecast, it would be slightly lower than the 2.6% median growth rate in the five years before the outbreak. The latest forecast shows that the economy will grow faster after a sharp decline in 2020, with an annual growth rate of 3.1% in the third quarter.

Tariffs could weigh on economic growth

President-elect Donald Trump is a wild card for the economic outlook, particularly because he campaigned on a promise to impose high and widespread tariffs on imports, particularly from China.

Forecasters at Goldman Sachs expect he will impose only limited tariffs, which they expect will have a minimal impact on the economy. However, economists believe that high tariffs, as promised by Trump, may push up the prices of various products, trigger inflationand drag down the economy.

“The biggest risk is large-scale across-the-board tariffs, which could severely hit economic growth,” Goldman Sachs chief economist Jan Hatzius and other economists wrote in a commentary.

Still, forecasters at Goldman Sachs are optimistic, predicting the economy will grow at a healthy annual rate of 2.5% in 2025.