Rotterdam-headquartered asset manager Robeco has just published its 2025 global economic and financial markets outlook entitled “This is not a landing.”

Robeco, the Dutch fund management house, forecasts another challenging year for the global economy in 2025, marked by conflicting signals and complex dynamics, and outlines different scenarios needing adaptable investment strategies.

The US economy shows signs of continued resilience, despite cooling consumption, Robeco said in a note. While other regions – particularly Europe and China – are getting out of the doldrums, they face ongoing secular pressures, the asset manager added.

In its base case, Robeco expects US growth to moderate in 2025, tempered by cooling consumption and higher tariffs. Yet, both fiscal as well as monetary policy remains procyclical. Real GDP is projected to grow by 1.7 per cent, reflecting a mild stagflationary trend as inflation remains slightly above consensus. European consumption could see a modest cyclical rebound supported by easing credit conditions and strengthening fiscal impulse, while China’s stimulus efforts are anticipated to offset some downside risks without reversing disinflationary pressures.

Meanwhile, Paris-based Edmond de Rothschild believes that China's economy offers a note of optimism, but finds Beijing’s stimulus measures disappointing as their impact is unlikely to solve the country’s structural problems. Due to the rising dollar and negative prospects for global exports, after US President-elect Donald Trump’s victory, the firm has decided to raise exposure to US equities, maintain its positive take on Chinese equities and reduce emerging country equities. See more commentary here. 

In a more optimistic, bull scenario, Robeco believes that synchronised easing from central banks and steady disinflation could lead to stronger-than-expected global growth. With US consumption growth holding above its long-term trend and stable energy markets keeping inflation in check, this environment could fuel a global economic upswing. An easing of US-China trade tensions would enhance corporate confidence and investment, providing further support to both equity markets and emerging economies, the firm continued.

Robeco’s bear case sees a turbulent environment where escalating tariffs, geopolitical tensions, and high military spending lead to global stagflationary pressures. The resulting inflation spike would disrupt bond markets and corporate investments, with US consumers bearing the brunt of rising tariff costs, Robeco said.

“The possibility of a stagflationary twist arising from trade policies could prove to be a powerful cross-current in an otherwise resilient US economy. We explain how momentum can reverse quickly in today’s data-driven environment, underscoring the need for flexibility in multi-asset allocation,” Peter van der Welle, multi-asset strategist at Robeco, said.

Financial markets outlook
Robeco anticipates that US equities will sustain their upward trajectory, with the S&P 500 reflecting extended valuations following a year of strong performance. However, market sentiment could shift abruptly as macroeconomic narratives evolve, highlighting the importance of diversified and dynamic portfolio management. Robeco’s outlook suggests caution in high yield bonds, where spreads are tight, while euro investment grade credit appears more attractive relative to the US. Looking ahead, Robeco anticipates that shifting macro data, US trade policy, and global liquidity conditions will all impact the asset class returns in 2025.

Sustainable investing outlook
Heading into 2025, Robeco’s outlook on sustainable investing highlights the resilience of long-term sustainability trends, despite near-term uncertainties. The ongoing economic challenges may cause some businesses and investors to deprioritise sustainability in the short term. However, the overall trajectory towards decarbonisation remains intact. While the US may see a near-term slowdown in support for sustainability under new leadership, Europe’s strengthened ESG regulations and ongoing commitment to green industries provide a solid foundation for sustainable investments, Robeco said. Despite some headwinds, Robeco expects the momentum towards global sustainability goals to continue beyond 2025.

“Despite challenges in the short term, the transition to a more sustainable global economy remains a key pillar of long-term growth. Europe’s regulatory and political environment remains supportive, while investors with a forward-looking perspective are well positioned to navigate short-term uncertainties effectively,” Rachel Whittaker, head of sustainable investment research at Robeco, said. 

Robeco has €204 billion ($215 billion) in assets under management, of which €200 billion is committed to ESG integration.