Danske Research Team
Danske Bank A/S
Welcome to budget guide 2025
As we head into an autumn that looks set to be characterised by central bank rate cuts and continued macroeconomic and geopolitical uncertainty, we at Danske Bank Research present the Danske Bank Budget Guide 2025. The Budget Guide includes our outlook on the global economy, as well as fixed income and FX markets, for the year ahead.
We extend our forecasts until the end of 2025 and seek to answer a number of questions that companies will likely face in the coming months:
-
What is the outlook for the global economy?
-
How are key export markets doing?
-
How should companies hedge their liabilities?
-
How should companies hedge FX exposure?
Budget Guide 2025 is intended as a quick reference guide to help facilitate EUR-based companies' 2025 budget planning. With this in mind, we present three scenarios for the global economy in general and the USD in particular.
Baseline scenario – Normalising economies (50% probability)
Economic growth, inflation, unemployment rates and interest rates have, to varying degrees, moved towards normal levels in the US, the euro area, and the Nordic countries, following the extremes of COVID and high inflation. We expect this process to continue, which implies higher growth in Europe and most Nordic countries, and slightly lower growth in the US. Labour markets should become slightly less tight, and rising real incomes should support European consumer spending. Lower interest rates should be a modest support for construction and investment. • High interest rates have been instrumental in fighting inflation, but now the time has come to lower them. The US has a higher starting point than the euro area, and US inflation is more clearly under control, so we expect the Federal Reserve to move faster. All central banks are however expected to be cautious and respond to data.
The Chinese economy continues to struggle with a housing crisis and weak private consumption. Growth is held up by stimulus and a moderate improvement in exports. We look for more of the same in 2025 with growth just below 5%. This is a negative factor for many European businesses with large sales in China.
This publication has been prepared by Danske Bank for information purposes only. It is not an offer or solicitation of any offer to purchase or sell any financial instrument. Whilst reasonable care has been taken to ensure that its contents are not untrue or misleading, no representation is made as to its accuracy or completeness and no liability is accepted for any loss arising from reliance on it. Danske Bank, its affiliates or staff, may perform services for, solicit business from, hold long or short positions in, or otherwise be interested in the investments (including derivatives), of any issuer mentioned herein. Danske Bank's research analysts are not permitted to invest in securities under coverage in their research sector.
This publication is not intended for private customers in the UK or any person in the US. Danske Bank A/S is regulated by the FSA for the conduct of designated investment business in the UK and is a member of the London Stock Exchange.
Copyright () Danske Bank A/S. All rights reserved. This publication is protected by copyright and may not be reproduced in whole or in part without permission.
Recommended Content
Editors’ Picks
Gold trades near record-high, stays within a touching distance of $3,100
Gold clings to daily gains and trades near the record-high it set above $3,080 earlier in the day. Although the data from the US showed that core PCE inflation rose at a stronger pace than expected in February, it failed to boost the USD.
EUR/USD turns positive above 1.0800
The loss of momentum in the US Dollar allows some recovery in the risk-associated universe on Friday, encouraging EUR/USD to regain the 1.0800 barrier and beyond, or daily tops.
GBP/USD picks up pace and retests 1.2960
GBP/USD now capitalises on the Greenback's knee-jerk and advances to the area of daily peaks in the 1.2960-1.2970 band, helped at the same time by auspicious results from UK Retail Sales.
Donald Trump’s tariff policies set to increase market uncertainty and risk-off sentiment
US President Donald Trump’s tariff policies are expected to escalate market uncertainty and risk-off sentiment, with the Kobeissi Letter’s post on X this week cautioning that while markets may view the April 2 tariffs as the "end of uncertainty," it anticipates increased volatility.
US: Trump's 'Liberation day' – What to expect?
Trump has so far enacted tariff changes that have lifted the trade-weighted average tariff rate on all US imports by around 5.5-6.0%-points. While re-rerouting of trade will decrease the effectiveness of tariffs over time, the current level is already close to the highest since the second world war.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.