Momentum Investments: 2025 economic outlook

The year 2024 brought about a dynamic global market landscape with significant political changes, interest rate shifts, and concerns over rising inflation. In a recent interview with CNBC Africa, Sanisha Packirisamy, Chief Economist at Momentum Investments, discussed the key events that shaped markets in 2024 and the factors expected to influence 2025. One of the major surprises of 2024 was the rise of dissatisfaction among electorates globally due to soaring food and fuel inflation, leading to the ousting of several incumbent governments. The return of Donald Trump to the White House in 2025 has sparked fears regarding the economic policies he may implement. Despite the challenges, South Africa saw positive developments such as a new government of national unity and a reduction in load shedding. Looking ahead to 2025, Packirisamy expects South Africa's growth to pick up, driven by structural reforms and infrastructure investments. The formation of the GNU has boosted sentiment and confidence levels in the country, laying the groundwork for increased investor activity. However, concerns loom regarding inflation, with potential tariff policies from Trump posing risks to the global economy. Packirisamy anticipates a world of higher inflation and U.S. exceptionalism, where the U.S. outpaces the rest of the world in growth. As uncertainties and challenges persist, the economic outlook for 2025 remains a mix of change and unpredictability.