Slightly better economic forecasts for 2025

The global economic outlook for the coming years has improved fractionally compared to last year. This is according to our recent report.  The report focuses on stable but not spectacular growth, combined with declining inflationary pressures. Although global economic growth is expected to average 2.8% through 2026, significant challenges remain in terms of inflation, recession risks and geopolitical tensions.

Annualized global economic growth of 2.8% is in line with the long-term average. The U.S. economy is slowing but remains an important mainstay of the global economy. US growth is expected to fall from 2.6% in 2024 to 1.7% in 2025 before recovering to 2.2% in 2026. Europe is showing signs of recovery, although Germany is likely to remain in recession until the end of 2024.

China's economy is still reeling from the ongoing real estate crisis. There are at least 65 million vacant homes in China. Or enough houses to house the entire population of France. That vacancy rate is undermining private sector confidence. Government support measures still offer little relief. But this is now being increased significantly. Substantial support measures were recently announced again. We expect China to grow about 5% in 2024, declining to just above 4% in 2025-2026.

Inflation is a major theme in our report, with inflation expected to fall to the ECB target of 2% by the first half of 2025 (this is seen as optimal for the growth of the economy. Inflation could hamper the growth of the economy). Lower prices for energy and goods depress inflation. Central banks will cut their interest rates to 3.5% (Fed) and 2.25% (ECB).

The global economic outlook remains vulnerable due to several geopolitical risks, including the ongoing war in Ukraine and Gaza and tensions in the South China Sea. In addition, elections in the U.S. are creating uncertainty about U.S. trade policy. These factors could lead to increased inflation and a prolonged period of higher interest rates, which would hamper economic recovery.

Our research department also points to the challenging public finances in the Eurozone. Countries like France and Italy, as well as Spain and Belgium, will have to make great efforts to reduce their government deficits. This could also hamper economic growth.

In our latest Global Insolvency Report, we expect an increase of 11% in the number of bankruptcies worldwide in 2024, with a further 2% increase in 2025. By 2026, the number of bankruptcies should stabilize. More than half of global GDP will be affected by double-digit increases.  Overall, our insolvency index for 2024 is likely to stand +13% above the 2016-2019 average, but -11% below the level of the global financial crisis ((2008-2010).

The Netherlands remains the worst country of Europe

Bankruptcy rates in the Netherlands will remain the worst in the Eurozone over the coming years. An increase of +35% is forecast for 2024. For 2025 and 2026, we forecast a decrease in the Netherlands of -2% and -1% respectively. Nowhere else in the euro zone is this decline so slight.

Record figure in Belgium in 2024

In Belgium, where the catch-up in the number of bankruptcies began earlier (2022) and already appeared large, the number of failures will reach a 10-year record in 2024, with more than 11,000 cases (+8%), and a notable increase in the construction, transport and logistics sectors.