Central Banks Identify Key Global Economic Risks for 2025
24 March 2025 · Uncategorized ·
Source: · https://technews.tw/2025/03/18/4-uncertainty-trump/
Amidst turbulent international relations and an uncertain economic outlook, a central bank report has identified four major uncertainties affecting global economics in 2025. The first uncertainty stems from President Donald Trump’s new policies; his potential tariff wars could trigger retaliatory measures from other countries, escalating into broader trade conflicts that disrupt supply chains and increase business operational difficulties.
Upon returning to the presidency on January 20th for a second term, President Trump swiftly signed multiple executive orders and initiated aggressive tariffs. However, inconsistencies in his policy statements have further clouded economic prospects.
The central bank report projects slowing global economic growth alongside cooling inflation by 2025; however, four key variables require close monitoring: first, the high uncertainty surrounding Trump’s policies due to potential trade partner retaliation and supply chain disruptions; second, challenges faced by major central banks as they adjust monetary policy in fluctuating global conditions; third, a downward risk for China's economy stemming from internal demand issues that could lead to low-priced goods flooding international markets—potentially triggering retaliatory measures and impacting global trade development.
The fourth uncertainty is heightened geopolitical risks leading to increased supply chain uncertainties, which may increase market volatility and slow globalization, making economic growth more challenging. Structural changes such as declining productivity due to aging populations, energy transitions, and extreme weather events could also contribute to inflationary pressures.
Should the economy underperform or inflation fail to cool sufficiently, public confidence in the economy could erode, potentially leading to social unrest.
The central bank notes that Trump’s rapid announcement and implementation of policies—such as tariffs without clear details—have increased policy uncertainty, already eroding business and consumer economic confidence. This is evident from recent financial market volatility where “Trump trade” optimism appears to be waning.
(Writer: Pan Ziyu; Image Source: Flickr/Trump White House Archived CC BY 2.0)
Upon returning to the presidency on January 20th for a second term, President Trump swiftly signed multiple executive orders and initiated aggressive tariffs. However, inconsistencies in his policy statements have further clouded economic prospects.
The central bank report projects slowing global economic growth alongside cooling inflation by 2025; however, four key variables require close monitoring: first, the high uncertainty surrounding Trump’s policies due to potential trade partner retaliation and supply chain disruptions; second, challenges faced by major central banks as they adjust monetary policy in fluctuating global conditions; third, a downward risk for China's economy stemming from internal demand issues that could lead to low-priced goods flooding international markets—potentially triggering retaliatory measures and impacting global trade development.
The fourth uncertainty is heightened geopolitical risks leading to increased supply chain uncertainties, which may increase market volatility and slow globalization, making economic growth more challenging. Structural changes such as declining productivity due to aging populations, energy transitions, and extreme weather events could also contribute to inflationary pressures.
Should the economy underperform or inflation fail to cool sufficiently, public confidence in the economy could erode, potentially leading to social unrest.
The central bank notes that Trump’s rapid announcement and implementation of policies—such as tariffs without clear details—have increased policy uncertainty, already eroding business and consumer economic confidence. This is evident from recent financial market volatility where “Trump trade” optimism appears to be waning.
(Writer: Pan Ziyu; Image Source: Flickr/Trump White House Archived CC BY 2.0)