HSBC 2025 Economic Outlook: Impact on Treasury

(12 December 2024 – Global) HSBC has published six key economic outlook insights for 2025 with three strategic considerations emerging as fundamental to building resilience and tackling growth opportunities in an uncertain market.

Key Economic Insights for 2025 with an impact on treasury:

1. Riding the US Growth Wave Amid Change: The U.S. economy is projected to maintain a steady growth rate in 2025, whilst navigating political change.
2. India and the UK: Bright Growth Spots: India is forecasted to expand by at least 6.5 percent, maintaining its reputation as one of the fastest-growing major economies. Similarly, the UK may join the outperformance story, with a mild acceleration in growth expected. This is driven by additional government spending, rising real incomes, and a drop in interest rates.
3. Steady Growth in China and Hong Kong: With subdued confidence and a still-weak housing sector, stimulus measures in mainland China do not appear to be lifting the growth story materially for now. Growth may be at a slower pace than historical trend. Hong Kong’s outlook remains closely tied to the global trade cycle and domestic consumer demand, both of which face current headwinds. Potential easing by the US Federal Reserve and the ongoing stimulus initiatives in mainland China are expected to offer some cushion for the economy in 2025, with growth projected at 2.7 percent.
4. Eurozone Challenges: The eurozone faces economic headwinds, particularly in Germany, where the industrial sector struggles to maintain competitiveness. Structural reforms may be essential to reinvigorate this key region.
5. Boost in Consumer Confidence: Discretionary spending remains high due to rising real incomes and evolving consumer behaviour. With substantial savings and declining interest rates, consumer spending is expected to cushion growth in many markets.
6. The Global Easing Cycle: Central banks are poised to cut rates by 100-150 basis points across most developed economies. This coordinated easing underscores efforts to sustain growth while countering inflation risks.

Based on these economic trends, three strategic considerations emerge as fundamental to building resilience and driving growth:

1. The evolving role of treasury as a strategic partner
2. The need to identify and capitalise on growth opportunities
3. The imperative to transform treasury operations by embracing data stand out as priorities

Addressing these will enable treasurers to not only mitigate risks but also proactively seize opportunities in the face of economic uncertainty.

“2025 brings an uncertain economic outlook. Whilst uncertainty often appears as a threat, it also offers a unique opportunity to reimagine treasury operations, redefine the treasurer’s role, and uncover new avenues for growth. What lessons can treasurers learn from recent global events and how can these help them enhance their organisations’ resilience, align more closely with business needs, and secure a competitive edge?” commented HSBC Head of Global Payments Solutions, Manish Kohli.

“It was great to be joined by my HSBC colleagues Vivek Ramachandran and Rahul Badhwar to share our thoughts on the opportunities for treasurers to build resilience and tackle growth opportunities in an uncertain economic landscape in the year ahead. Businesses and treasurers that embrace and prepare for uncertainty are the ones who will thrive.”

“The growth of cross-border activity be it across supply chains or an international customer base means that payment and FX continue to occupy an increasing share of a treasurer’s mind. Innovative payment and FX strategies can go a long way in improving customer experience while addressing operational complexities. For treasurers finding an integrated solution that works is pivotal in achieving the organisations financial objectives as well as delivering value add to their customers” stated HSBC Global Head of Corporate Sales, Markets & Securities Services, Rahul Badhwar.

“The corporate treasurer is integral to helping the company to navigate challenges and seize opportunities, whether in reshaping supply chains, meeting sustainability objectives, or capitalising on technological advancements. The treasurer now is no longer just optimising cash flow; they enable companies to fulfil their strategic objectives and respond to a changing world” said HSBC Head of Global Trade Solutions, Vivek Ramachandran.

Click to access the full outlook: https://www.gbm.hsbc.com/insights/innovation/2025-economic-outlook-impact-on-treasury