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EIU Industry 2025 Report: Geopolitical Risks And US-China Trade Tensions Will Force Businesses To Review Strategies

Economic growth in 2025 will be modest, with EIU forecasting that real GDP will increase by 2.6% as developed economies slow

  • EIU’s 14th annual Industry report forecasts growth and key risks in six business sectors in 2025, including automotive, energy, finance, healthcare, retail and technology
  • Economic growth in 2025 will be modest, with EIU forecasting that real GDP will increase by 2.6% as developed economies slow.
  • We expect inflation to ease, allowing for further monetary easing. Prices for agricultural and energy commodities will fall, but those for industrial raw materials will rise.
  • Asia as a region will continue to lead global business growth, but its exporters will have to cope with increasing regulatory and tariff barriers affecting sectors from electric vehicles to healthcare. Worsening US-China trade tensions will reshape supply chains and force businesses to rethink their strategy.
  • Investment in technology, especially in artificial intelligence (AI), will remain strong, but tech companies will face regulatory pressures, investor impatience and scrutiny over energy usage.
  • Climate change issues will further increase geopolitical tensions. National climate pledges will be updated at COP30 in November 2025, but much will depend on US leadership.

EIU has published a new report looking at the growth prospects and regulation of six business sectors in 2025, as geopolitical tensions worsen and climate change poses new challenges.

The report argues that trade tensions between China and the US have worsened so much that many companies are having to reshape their strategies and supply chains to cope with a polarised world.

Although Asia will continue to lead business growth, its exporters will have to cope with increasing regulatory and tariff barriers affecting sectors from electric vehicles to healthcare.

This will change investment flows across the region, as companies try to diversify their supply chains.

Overall, economic growth in 2025 will be modest, with EIU forecasting that inflation will ease, and real GDP will increase by 2.6% as developed economies slow.

 Ana Nicholls, Director of Industry Analysis at EIU, says: “The Chinese economy will accelerate slightly in 2025, thanks to modest stimulus, while Japan will tick up and smaller developing markets such as India will deliver significant growth.

“Even so, the outlook for Asia remains uncertain. With the wars in Ukraine and the Middle East likely to continue into next year, and US-China trade relations worsening, companies will have to cope with heightened geopolitical tensions, as well as the increasing impact of climate change.

“We foresee the technology and automotive sectors splintering as regulation diverges too.”

 

EIU’s report also provides key global forecasts for each of the six industries: 

Energy: Fossil-fuel markets will continue to face geopolitical risks amid conflicts in the Middle East and Ukraine, but investment into renewables will remain strong, particularly in China.

Financial services: Falling interest rates will weigh on bank profit margins, leading to lower dividend payouts, but the Basel III endgame will be eased or delayed further.

Consumer goods and retailing: Global retail volumes will expand by 2.2%, helped by disinflation, but regulations around online retailing will tighten further, particularly for high-volume low-price Asian retailers such as Shein and Temu.

Technology: Investment, especially in artificial intelligence (AI), will remain strong, but technology companies will face regulatory pressures, investor impatience and scrutiny over energy usage. More countries will start using satellite internet, but use cases will be limited to enterprise clients—military and maritime. Amazon’s Kuiper will disrupt the market duopoly of Starlink and EutelSat OneWeb.

Automotive: After a difficult few years, annual new-vehicle sales will reach a record 97.2m units in 2025. EIU forecast that sales of new cars will rise by 2%, commercial vehicles by 3% and electric vehicles by 25%.

Healthcare: Global healthcare spending will outpace inflation, growing by 1.9% in real terms. The World Health Organisation will make climate change the focus of its 14th four-year general programme, which starts in 2025. – BACALAHMALAYSIA.MY

BacalahMalaysia Team

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