Prospects for 2025 are visible in the end-of-year haze

India will have its hands full as the US and China clash, geopolitics thickens and AI impacts jobs

- RAJRISHI SINGHAL

Wintry January mornings are known to obscure clear 20/20 vision. When combined with year-end revelries, a chemically-induced mist occludes the faculty of foresight. But, as 2024 fades into the history pages, the year-end miasma might still hold some clues to prospects in 2025.

Among the many elements that will influence events, four global factors are critical because their impact will be felt on global interest rates, commodity prices, currency values and equity indices; these ripples promise to travel far and wide, including to India. Two of these elements involve strong men engaged in a game of one-upmanship.

One thing is certain: the incoming government in the US is sure to keep risk managers, forecasting agencies, scenario planners and geopolitical analysts busy. With Donald Trump promising to weaponize tariffs and clamp immigrant flows, while mocking climate change and taking an axe to the US's multilateral commitments, large-scale unpredictability is likely to undergird the next 12 months. This has the potential to upset growth and inflation projections, forcing Federal Reserve action that could shave values from global markets.

The trailer of another future volatile scenario was available recently when Republican members in the US Congress defied a Trump diktat to freeze a spending bill. With Trump and these Republican lawmakers certain to butt heads on more issues in the coming months, analysts should be prepared for a greatly impetuous White House impacting governance and the economy.