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Feb 06, 2025 Forecasts

Our forecasts

In light of the very dynamic market environment these forecasts are subject to change at any time.

Macro

Global growth rates converging

GDP growth (in %, year-on-year)

2024F

2025F
United States 2.7 ‌ 2.0
Eurozone 0.7 ‌ 0.9
United Kingdom 1.0 ‌ 1.2
Japan -0.1 ‌ 1.2
China 4.9   4.2
World 3.1 ‌ 3.1

Fiscal deficit (in % of GDP)

2024F

2025F
United States 6.6 ‌ 7.3
Eurozone 2.8 ‌ 3.0
United Kingdom 4.5 ‌ 3.7
Japan 6.0 ‌ 4.0
China 13.2 ‌ 13.1

Consumer price inflation (in %, year-on-year)

2024F

2025F
United States[1] 2.9 ‌ 2.4
Eurozone 2.3 ‌ 2.0
United Kingdom 2.5 ‌ 2.3
Japan 2.5 ‌ 2.0
China 0.5   1.3

Unemployment Rate (annual average)

2024F

2025F
United States 4.1   4.2
Eurozone 6.4 ‌ 6.3
United Kingdom 4.4   4.5
Japan 2.5 ‌ 2.4
China 5.1 ‌ 5.0

Benchmark rates (in %)

Current[2]

December 25F
United States 4.50-4.75 ‌ 3.75-4.00
Eurozone 3.25 ‌ 2.00
United Kingdom 4.75 ‌ 3.00
Japan 0.25   1.00
China 3.10 ‌ 2.75

Commodities (in dollars)

Current[2]

December 25F
Crude oil (Brent) 72.0 ‌ 69
Gold 2,571   2,800
Copper (LME) 9,200   9,850
Carbon 68   75

Equities

Positive thinking prevails

Current[3]

December 2025F

Forecast

Total Return (exp.)[4]

Expected earnings growth

P/E impact

Dividend yield

United States
(S&P 500)

 6,038 ‌ 6,500 9.0% 12.2% -5.0% 1.3%

Europe
(Stoxx Europe 600)

 537   550 5.8% 6.0% -4.0% 3.4%

Eurozone
(Euro Stoxx 50)

 5,259   5,350 4.9% 6.0% -4.0% 3.2%

Germany
(DAX)[5]

 21,498   22,500 4.7% 6.6% -4.0% 2.7%

United Kingdom
(FTSE 100)

 8,583   8,500 2.8% 4.0% -5.0% 3.8%

Switzerland
(Swiss Market Index)

 12,536   12,550 3.3% 9.0% -8.0% 3.2%

Japan
(MSCI Japan Index)

 1,691 ‌ 1,770 7.0% 7.0% -2.0% 2.4%

MSCI Emerging Markets Index
(USD)

 1,097 ‌ 1,200 12.3% 11.0% -2.0% 2.9%

MSCI AC Asia ex Japan Index
(USD)

 710 ‌ 770 11.1% 11.0% -2.0% 2.6%
 

F refers to our forecasts as of 02/06/25

Fixed Income

Yields without clear direction

Current[2]

December 2025F
United States
U.S. Treasuries (10-year) 4.44%   4.50%
U.S. municipal bonds[6] 67 bp   75 bp
U.S. investment-grade corporates[6] 74 bp   85 bp
U.S. high-yield corporates[6] 266 bp   325 bp
Securitized: mortgage-backed securities[6] 142 bp   120 bp 
Europe
German Bunds (10-year) 2.36%   2.20%
UK Gilts (10-year) 4.47%   4.00%
Euro investment-grade corporates[7] 98 bp   95 bp
Euro high-yield corporates[7] 323 bp   400 bp
Securitized: covered bonds[7] 50 bp   50 bp
Italy (10-year)[7] 120 bp   150 bp
Asia- Pacific
Japanese government bonds (10-year)   1.07%   1.40%
Asia credit 133 bp   125 bp
Global
Emerging-market sovereigns 333 bp   390 bp

Currencies

Current[2]

December 2025F
EUR vs. USD 1.05   1.02
USD vs. JPY 154   145
EUR vs. GBP 0.84 0.82
GBP vs. USD 1.26   1.25
USD vs. CNY 7.23   7.45

F refers to our forecasts as of 02/06/25
LME = London Metal Exchange
bp = basis points

Legend:

  • Macro data exchange rates and alternative investments: The arrows signal whether we expect to see an upward trend  , a sideways trend   or a downward trend  .
  • The signals' colors illustrate the return opportunities for long-only investors:  positive return potential for long-only investors.  limited return opportunity as well as downside risk.  negative return potential for long-only investors.

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1. core rate, personal consumption expenditure as end of Dec 2024/Dec 2025 in % (no average as for the other figures in the table)

2. Source: Bloomberg Finance L.P. as of 11/15/24

3. Sources: Bloomberg Finance L.P., FactSet Research Systems Inc. as of 02/06/25

4. Expected total return includes interest, dividends and capital gains where applicable

5. Total-return index (includes dividends)

6. Spread over U.S. Treasuries

7. Spread over German Bunds

Index returns do not reflect fees or expenses, and it is not possible to invest directly in an index. All opinions and claims are based upon data on 02/06/25 and may not come to pass. This information is subject to change at any time, based upon economic, market and other considerations and should not be construed as a recommendation. Past performance is not indicative of future returns. Forecasts are not a reliable indicator of future performance. Forecasts are based on assumptions, estimates, opinions and hypothetical models that may prove to be incorrect. Alternative investments may be speculative and involve significant risks including illiquidity, heightened potential for loss and lack of transparency. Alternatives are not suitable for all clients. DWS Investment GmbH.

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