YEAR 2025 could start with a global financial downturn.
As of December 28, 2024, the Yuan, the Real, Rupee, the Korean Won and the Canadian Dollar lost ground against the US dollar.
Additionally, inflation is once again becoming an issue in the US, which may force the Fed to have no choice but play around with interest rates. And that does not cover the political factors, like South Korea’s crisis, the escalation of Tariffs or the possibility of economic chaos following Trump’s inauguration.
No one can predict the broad market, but a lot of investors are concerned about the global economy going into 2025. It’s worth mentioning that inflation was already a big issue last year, and China’s economic problems were already mounting with foreign money leaving the People’s Republic of China.
What is expected to happen in 2025 could be an extension of what happened last year, possibly becoming worse, depending on how factors turn out this year.
Here in the Philippines, we’re relatively safe. We faced a slowdown in the third quarter, growing at 5.2%. Not good but not bad either. The government believes it can meet its target of 6.5% growth in the fourth quarter.
But if the global economy does face major issues in 2025, that could go either way. We may face more inflation, a weakening of the peso, less overseas income, etc.
Fortunately, the Philippines has relatively good fundamentals, and I think if the global economy does face problems, we will end up in a better position than others.
In any case, the economic situation is manageable. Compared to war, disease or political instability, inflation and financial dysfunction are relatively better problems to have; that is as long as it doesn’t lead to worse issues./PN
