Geopolitical Tensions and Trade Policy
The global economy faces significant challenges. Geopolitical tensions and protectionist trade policies play a central role, potentially leading to a worldwide economic downturn. In recent months, the USA has increased tariffs, triggering a tariff spiral. These measures hinder global trade and slow economic growth. The USA and Canada are particularly affected, as their exports and imports could decline.
According to the World Trade Organization (WTO), trade volume is expected to decrease by at least 0.2 percent by 2025, and in the worst-case scenario, by up to 1.5 percent. A moderate recovery is only anticipated for 2026.
Impacts on the Economy
The German economy is expected to see minimal growth of 0.1 percent of GDP in 2025, down from previous forecasts of 0.8 percent. The global economy also suffers from the tariffs and geopolitical tensions that hamper investments. The WTO predicts a growth rate of 2.2 percent for 2025, falling short of prior expectations.
Impact on Markets and Investments
Uncertainty and protectionist measures can lead to market volatility. Investors should adjust their portfolios to minimize risk. Interest rates in advanced economies have been lowered to stimulate the economy. However, inflation due to tariff policy could rise, limiting the effectiveness of these rate cuts.
Private investors and savers should adjust their investment strategies according to the changing market conditions, prioritizing diversification and risk assessment.
Risks and Challenges
Protectionism and other geopolitical tensions increase the risk of a global economic downturn. The high uncertainty in the global economy hinders investments and affects growth. Furthermore, Germany and other countries face structural changes prompted by the transition to new technologies and energy sources. This requires adjustments in economic policy and investments in future-oriented sectors.
Overall, private investors and savers should closely monitor current developments and adapt their investment strategies to mitigate the risks of a global economic downturn.