Interest Rates Decline While Donald Trump’s Presidency Looms Over Economic Uncertainty
Despite economic uncertainties, the global economic outlook for 2025 remains relatively stable, with positive growth prospects for many economies, including Singapore. According to DBS economist Chua Han Teng, global inflation has eased due to post-pandemic recovery, stable commodity prices, and the dampening effect of high interest rates in recent years. Inflation in Asia, which was more supply-side driven, has also moderated.
Chua highlighted that interest rates have likely peaked and are expected to decline gradually across most economies in 2025, except in Japan, where rate hikes are still anticipated. Central banks in major economies, like the US Federal Reserve, have already reduced rates, which Chua believes will provide space for further cuts in the US and other Asian economies such as China, Indonesia, and the Philippines.
Despite global challenges, the overall economic growth outlook remains strong, with the US economy showing resilience, and Asia being identified as a key growth driver. However, political uncertainty, particularly with Donald Trump’s second term in office, could introduce risks that may affect global markets. Singapore, being highly trade-dependent, remains attentive to these potential global shifts.
