As we look back at 2024 and ahead to 2025, the economic forecasts suggest a landscape of moderate growth with regional variations.

Here’s a breakdown of Canada, the U.S., and the rest of the world:

Canada

2024 Economic Growth:

• GDP Growth:  A paltry1.2% in 2024, primarily driven by consumer spending on services and investments in technology and infrastructure. However, economic growth slowed toward the latter part of the year due to rising unemployment and higher interest rates.
• Key Trends: Resilience in sectors like healthcare, real estate, and technology.

2025 Economic Forecasts:

• GDP Growth: Projected at 1.7%, showing a modest recovery. British Columbia and other resource-rich provinces may see stronger-than-average growth.
• Key Factors: Immigration policies and housing challenges are expected to moderate potential growth.

2024 Stock Market Performance:

• The S&P/TSX Composite Index rose approximately 18.3%, hitting record highs, driven by strength in energy and financial sectors.

United States

2024 Economic Growth:

• GDP Growth: Estimated at 2.7%-2.8%, reflecting strong consumer spending and labor market conditions.
• Key Drivers: Continued investment in technology, AI, and clean energy.

2025 Economic Forecasts:

• GDP Growth: Projected at 2.0%, reflecting a "soft landing" with the economy stabilizing after aggressive rate hikes in 2023 and early 2024.
• Key Factors: Easing inflation and resilient consumer spending are expected to drive moderate growth.

2024 Stock Market Performance:

• S&P 500 Index: Gained 26%, supported by strong corporate earnings in technology and healthcare.
• Nasdaq-100 Index: Closed the year at a record 21,780.25, highlighting tech sector dominance.

Rest of the World

2024 Economic Growth:

• Global GDP Growth: Estimated at 3.2%, with emerging markets, particularly in Asia, leading at around 4.0% growth.
• Regional Insights: Europe faced slower growth due to energy challenges, while China’s recovery remained subdued.

2025 Economic Forecasts:

• Global GDP Growth: Projected at 3.0%, with stronger performance expected in Asia. Emerging markets are anticipated to benefit from investments in digital infrastructure and clean energy.

2024 Stock Market Performance:

• Global Equities:
• Emerging markets returned 9.6%, led by gains in technology and infrastructure development.
• European markets underperformed, reflecting lingering economic stagnation and energy disruptions.

Key Takeaways for Investors:

• Diversification is essential given regional disparities in growth and market performance.
• Focus on sectors like technology, healthcare, and clean energy, which are expected to remain strong into 2025.
• Canadian professionals and investors should watch U.S. economic developments closely due to integrated market dynamics.

Source: https://www.investopedia.com/