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“We live in a world where uncertainty is higher than ever. However, precisely this uncertainty opens up new opportunities,” began Didier Borowski, Head of Macroeconomic Research at the Amundi Investment Institute, during his speech at the “Amundi Investment Outlook – 2025” held in Yerevan on January 30.
Amundi, one of the leading players in the global investment market, has a strong presence in Armenia through its Armenian company, Amundi-Acba Asset Management, a leading pension fund manager in Armenia. The company organized its annual investment outlook discussion, bringing together financial experts, investors, government representatives, and professional bankers. . The event was part of Amundi’s global initiative, conducted in over 20 countries, focusing on global economic developments and investment opportunities.
Borowski forecasts that the coming year will be characterized by diverging economic growth and inflation trends, presenting investors with challenges and unique opportunities.
Economic Growth and Systemic Challenges
The global economy has demonstrated remarkable resilience in recent years. “The performance of the U.S. economy is awe-inspiring, with economic growth reaching nearly 3%, surpassing all forecasts,” noted Borowski. This is especially significant given the tightening of monetary policy over the past 18 months.
In the context of global trends, Borowski emphasized the role of the U.S. economy, which has become more uncertain with the return of Donald Trump. He particularly highlighted the possible economic impact of Trump’s proposed policies.
“Trump’s policy of mass deportation of undocumented migrants and the imposition of new tariffs could create significant inflationary pressures,” Borowski stated. “Labor market restrictions could drive wage increases in certain sectors, while tariffs would mechanically raise consumer prices.”
Borowski warns that these policies are being proposed when the U.S. economy already operates at full employment. “When we consider fiscal policy under full employment conditions, the inflationary risks are undeniably upward,” he said, noting that the Federal Reserve is currently in a wait-and-see mode. According to his forecast, the U.S. economy cannot sustain high growth trends for long, as its potential growth rate is around 2%.
Regarding Trump’s trade policy, Borowski remarked on his transactional approach: “Trump is a dealmaker. His foreign and economic policies are closely linked. For instance, in the case of Colombia, he initially threatened tariffs but withdrew the threat when Colombia agreed to accept certain migrants.”
On Trump’s approach to Europe, Borowski noted, “Although he speaks less about Europe compared to Canada and Mexico, this does not mean he has no plans. His primary goal is for Europeans to increase defense spending from the current 2% to 5% and to import more from the U.S.”
Borowski also pointed out that Trump’s second term would differ from his first. “This time, he is more prepared. His choice of team, such as appointing Scott Bessent as Treasury Secretary—a prominent investor, globalist, and opponent of protectionism—indicates a more cautious and gradual approach to tariff policies.”
European Challenges and Energy Transition
“The European economy, unfortunately, continues to disappoint,” observed Borowski. He identified several systemic problems in the region, including lack of competitiveness, low productivity, and insufficient private investment.
The energy transition is also contributing to inflationary pressures. “This is particularly crucial for Europe, where renewable energy now accounts for a larger share of the energy mix than coal. This is strategically significant for Europe’s energy independence,” he stated.
However, Borowski also highlighted some positive trends. “Smaller European economies, such as Spain, Portugal, Ireland, and Greece, are showing impressive growth rates between 2% and 4%. If we consider the Eurozone as a whole, the combined weight of these smaller economies is equivalent to that of Germany.”
Discussing Germany, Borowski emphasized the importance of the February 2025 elections: “This is critical for Germany and all of Europe. The Germans must reform their economic model, taking into account energy security challenges and dependence on China.”
The European banking system, according to Borowski, is in a favorable position. “European banks are benefiting from the current interest rate levels and regulatory environment. They are less exposed to global trade tensions and can take advantage of local market growth.”
The Russian Economy
Borowski outlined short-term and long-term scenarios for the Russian economy. “Russia has transformed into a wartime economy, with 6% of GDP allocated to defense—an unprecedented figure. In comparison, Europe’s defense spending barely reaches 2%.”
“Surprisingly, despite sanctions, Russia’s economic growth has exceeded expectations. This is primarily due to strengthened trade ties with China. Russia has successfully redirected its energy exports to China and India,” he noted. However, in the long run, Russia faces structural challenges. “Demographic decline, limited access to international investment, and technological isolation significantly constrain its long-term growth potential.”
Borowski predicts that Russia’s potential growth will be under significant pressure without defense spending over the next decade. “The problem is that Russia will struggle to attract investment in non-defense sectors.”
On international relations, he added, “Even if an agreement is reached on Ukraine, Western economies must quickly reassess their approach to Russia. Otherwise, Russia will have no choice but to continue increasing military spending to maintain economic activity.”
“This creates a worrying cycle. In response, European countries must also increase defense expenditures to maintain regional stability over the next decade. This is a new world order that everyone must adapt to,” Borowski concluded.
Emerging Markets and Technological Changes
Discussing emerging markets, Borowski highlighted contrasting trends. “India shows impressive growth potential at around 6%, while China’s growth rate is slowing significantly to about 3%.” He pointed out deflationary pressures and serious issues in China’s real estate sector.
“The nature of inflation has changed. Previously, it was driven mainly by food and energy prices, but now services are the primary driver of inflation.” Borowski predicts that central banks will no longer return to ultra-low interest rate policies and will adopt a more cautious “wait and see” approach.
Borowski emphasized artificial intelligence on technological advancements: “Over the next five years, AI could significantly boost productivity, but the role of human expertise should not be underestimated.”
Conclusion
Borowski summarized his analysis by stating that despite market volatility, the global investment landscape presents numerous opportunities, ranging from emerging Asian markets to long-term sustainable investment themes.
Fixed-income instruments, small-cap companies, and financial institutions appear particularly promising. The expert underscored the importance of asset diversification to ensure long-term stable growth.
“The high level of uncertainty demands a cautious yet proactive management approach. However, with the right strategy, today’s challenges can be transformed into significant opportunities,” Borowski concluded.
Read the article in Armenian: Անորոշություն և հնարավորություններ. «Ամունդիի» վերլուծաբանը՝ գլոբալ տնտեսության միտումների մասին
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