Discover the exclusive interview with Christophe Barraud*, top economic forecaster for the United States, China and the eurozone. Analysis of global issues, methodologies and economic outlook for 2025.
Monaco for Finance had the privilege of talking to Christophe Barraud, Managing Director of Market Securities Monaco SAM, a renowned economic analyst regularly singled out for the accuracy and relevance of his forecasts on trends in the world's major economies. Here we take a look at his analyses, methods and outlook for the US, European and Chinese economies in a rapidly changing global context.
Introduction to Christophe Barraud B and his expertise
At the end of 2024, you were once again singled out as the best forecaster for the United States, China and the eurozone. What is your reaction to this recognition?
It's a great honour, and I have to say that this simultaneous recognition for three zones of international influence is particularly gratifying. It's been some time since I was ranked first for all three zones at the same time. It's an excellent start for 2025, and reflects the importance of always anticipating with rigour and in-depth analysis of global trends.
Bloomberg top forecasters: https://www.christophe-barraud.com/%e2%98%86%e2%98%86%e2%98%86-bloomberg-top-forecasters-q4-2024-1st-place-u-s-1st-place-china-1st-place-eurozone-%e2%98%86%e2%98%86%e2%98%86/
Economic analysis methodology
You are renowned for your accurate economic forecasts. Can you tell us more about your methodology?
My forecasts are based on a multidimensional approach that combines quantitative data, qualitative analysis and constant monitoring of geopolitical and technological developments. I also attach great importance to the dynamics of economic cycles and the behaviour of financial markets. What often makes the difference is the ability to identify weak signals, those precursory indicators that enable us to understand fundamental movements before they become obvious to everyone.
Economic forecasts for USA
Today, the day of Donald Trump's inauguration, is a day of political and economic transition in the United States. What can we expect from the new administration in economic terms?
US economic growth looks set to be robust, with a forecast of 2.3% for 2025, higher than the current consensus: 2,1%. Since the election, business confidence, particularly among SMEs, has strengthened and stock market indices continue to rise. This momentum will support consumption in the short term. However, a number of uncertainties remain, notably concerning the tax measures announced, which could put pressure on the deficit and inflation. The issue of immigration and the potential reduction in the labour supply are also major challenges.
In addition, the deregulation policy envisaged by the new administration could play a driving role for certain sectors, such as energy and financial services. However, these measures need to be carefully calibrated to avoid adverse effects on the economy in the medium term.
What impact could these policies have on inflation and the markets?
Inflation remains a crucial issue. With wages at 4%, it will be difficult to bring inflation down to the 2% target. If expansionary fiscal measures or customs duties are introduced, they could exacerbate inflationary pressures, especially in a context of strong demand. In addition, rising deficits and interest rates could limit the government's economic room for manoeuvre.
Another key point is managing market expectations. Investors are keeping a close eye on the new administration's announcements and their implications for monetary and fiscal policy. Coordination between the Fed and the government will be key to maintaining a balance.
source: US Treasury
Economic forecasts for Europe.
What is your assessment of Europe?
Europe is experiencing a timid recovery, with growth forecast at around 0.9% for 2025. Political uncertainties, particularly in Germany and France, are weighing on investment and consumption. However, the ECB has some leeway to cut its key rates, which could stimulate activity in the short term.
A peace agreement between Russia and Ukraine could also ease tensions and support European economies, notably through lower energy and food prices. However, Europe faces structural challenges, notably a backlog of strategic investments. Without ambitious action, the competitiveness gap with the United States and China could widen.
source: Bloomberg
Economic Challenges in China
What are the challenges for China in this global context?
China is facing an economic turning point, with structural challenges such as stabilising the property market and boosting household consumption. The Chinese administration appears to be adopting an expansionary fiscal policy to support growth, which we expect at 4,7%, against a consensus at 4,5%. The election of Donald Trump could heighten trade tensions, but it could also prompt China to speed up its domestic reforms.
More generally, China is working to strengthen its economic autonomy and redirect its growth towards the domestic market. Efforts to stabilise household and business confidence will be crucial, particularly after a period of great uncertainty linked to the property market.
source: Bloomberg
What about India
India is a fascinating economy with immense growth potential. Its young population, combined with a pool of highly qualified engineers, offers unique opportunities. However, it faces major structural challenges. The country is often described as an ‘organised bazaar’, with a complex administration, uneven infrastructure and linguistic and cultural diversity that can hinder progress. That said, India has managed to position itself as a key player, thanks to policies that are attractive to investors and effective diplomacy.
World Economic Outlook
What are the major risks and opportunities for the global economy in 2025?
We forecast global growth of 3.2%, slightly above the consensus of 3%. The United States and China should drive global momentum, by investing in the sectors of the the future but Europe could lag behind if it does not invest massively in strategic sectors. Africa, India and Brazil are also growth regions to watch, although their dynamics are heterogeneous.
The management of geopolitical tensions, particularly in Ukraine and the Asia-Pacific region, will also play a crucial role. An easing of tensions could provide further support for global growth.
In conclusion, what messages would you like to send to Monaco's financial players?
Global uncertainties call for heightened vigilance, but they also create opportunities for strategic investors. Monaco, with its agile and connected financial ecosystem, is ideally positioned to take advantage of global economic developments. It is essential to remain proactive, identify long-term trends and be ready to seize opportunities in an ever-changing environment.
To find out more, read Christophe Barraud's article, ‘Anticipating Global Challenges and Demystifying the Global Economy’, for an outlook on current economic dynamics and key forecasts for the years ahead.
https://www.monacoforfinance.mc/fr/articles/autres-sujets/1751-christophe-barraud-anticiper-les-enjeux-mondiaux-et-d%C3%A9mystifier-l-%C3%A9conomie-globale.html
*Christophe Barraud a rejoint Market Securities en 2011 et occupe le poste de chef économiste et stratégiste. Il a été classé par Bloomberg comme meilleur prévisionniste sur les statistiques américaines (2012-2020 et 2022, 2023, 2024), meilleur prévisionniste sur les statistiques de la zone euro (2015-2019 et 2022, 2024) et meilleur prévisionniste sur les statistiques chinoises (2017-2020 et en 2024). MarketWatch lui a également décerné le titre de meilleur prévisionniste sur les statistiques américaines en 2020. Depuis 2021, il est également chargé de cours à l’ESCP dans le Master of Science (MSc), spécialisation Finance, classé meilleur Master au monde par le FT. Ses recherches s’adressent à une vaste catégorie d’investisseurs institutionnels partout dans le monde (banques, assurances, sociétés de gestion, hedge funds, fonds de pensions, etc…), mais également à des organismes publics (Etats, banques centrales, etc.). Dans le cadre de ses fonctions, il a été nommé Chevalier de l’ordre national du Mérite en 2021. Enfin, en novembre 2023, il est également devenu directeur général de Market Securities Monaco S.A.M.
https://www.christophe-barraud.com/fr/biographie/
Photo Crédit: studio Loic Bisoli
