PARIS (Reuters) – The year 2025 will be marked by the resistance of the American economy and the persistence of inflation in services around the world, estimates ABN Amro IS, which also considers the financial risks weighing on France to be limited.
The American economy remains immune to rate increases, supported by a significant productivity gap with the rest of the world, concentrated primarily in the IT sector and probably linked to the first impacts of artificial intelligence, explains the bank .
The main unknown remains that of the policy that Donald Trump will put in place, “whose goals may appear contradictory and which relies on his tariff threats as negotiation tools”, summarizes Christophe Boucher, investment director for ABN Amro IS.
The majority that the American president has in the House of Representatives remains fragile and Donald Trump could therefore take the most important measures, on immigration, tax cuts, deregulation and customs duties, during the first two years of his term, adds the manager.
Added to American political uncertainty is uncertainty over activity, while industry remains in deep contraction, while the tertiary sector continues to grow in developed countries.
“Central banks are reaching the limit of what rate increases can accomplish. Industry, very capital-intensive and financed by debt, is much more sensitive to rate increases than services,” summarizes Christophe Boucher.
However, it is precisely in services that inflation remains persistent – the prices of goods are stagnating, or even eroding – and wanting to control this inflation could worsen the recession in the industrial sector.
“When the prices of durable goods stabilize, or even rebound, it is possible that inflation will start to rise again,” adds the strategist who expects a pause in rate cuts in 2025.
The bank also believes that the risks in France are contained.
“Certainly, a risk premium exists on French assets, but the markets will remain calm as long as the interest rate on the debt remains contained,” summarizes Christophe Boucher.
“Even if the budgets are simply renewed next year, this will automatically lead to a reduction in the deficit thanks to inflation.”
(Written by Corentin Chappron, edited by Augustin Turpin)
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