As per the NielsenIQ report, there will be a paradigm shift of some global catalysts which will determine the shape of the economy all over the world
Raghunath Mahapatra
The latest economic outlook of the Organization for Economic Co-operation and Development (OECD) projected that the global economy will remain resilient in 2025 and 2026, despite significant challenges. The Outlook projects global GDP growth of 3.3% in 2025, up from 3.2% in 2024, and 3.3% in 2026. Headline inflation has already returned to central bank targets in nearly half of the advanced economies and close to 60% of emerging market economies and it’s expected that the trend will continue. The private consumption growth remains subdued in most countries, reflecting weak consumer confidence. Of course, the global trade volumes are recovering.
The world’s leading global consumer Intelligence Company, NielsenIQ (NIQ), in its report “Mid-Year Consumer Outlook: Guide to 2025” has identified macro catalysts across industries. The study predicts that consumers will remain determined and resilient despite the uncertainties in the year ahead. The report anticipates that global consumers will spend $3.2 trillion more in 2025, representing nearly 6% growth compared with 2024. With looming uncertainty around geopolitical crises, economic stability, and environmental health, consumers are becoming resilient and will spend where it matters most. This shows a determined shift from cautious to intentional consumption, with a focus on a sense of prosperity and well-being.
As per the report, there will be a paradigm shift of some global catalysts which will determine the shape of the economy all over the world. Around 40% of consumers would accept a product recommendation from their Artificial intelligence (AI) assistant and 40% would leverage AI to automate and speed up their everyday shopping decisions.
The report also forecasts a rise in the impact of GLP-1 drugs, which mimic the effects of the body’s natural hormone by reducing appetite, slowing down the rate at which food leaves the stomach, and offering a slight boost in metabolism (which helps burn more calories at rest).
The report projects that 31% of global consumers are likely to use a medication or drug to support weight loss, but GLP-1 medications will drive a wide scope of impact by inspiring new spending sources, influencing consumer lifestyles, and shaping norms of interpersonal behavior.
Social Commerce
The social commerce revolution has led to the evolution of the evolution of omnichannel retail, which is a result of increasing consumer demand for flexibility and ease of use which aims to provide customers with a seamless shopping experience across all channels, including in-store, mobile, and online. There will be around a 12% increase in global online sales performance and the rise of games platforms, about with 36% of consumers saying they would spend more on a purchase because of an in-app experience. The year may see a higher commodity cost. Around 60% of the respondents said they will buy fewer snacks and confectionery products if prices continue to increase or remain high for the next three months.
The top concerns of the consumers will remain more or less the same at least in the first half of 2025: rising food prices, followed by increasing utilities costs, and the threat of an economic downturn. Climate change and related events are recognized as the fourth major concern in the coming years. A majority (67%) of surveyed consumers around the globe say they are likely to change or try a new brand because of lower pricing.
They intend to continue cutting back on non-essentials like Out-of-Home (OOH) Dining (38%), Out-of-Home Entertainment (37%), and Food Delivery/Takeaways (36%), while intentional choices around In-Home Entertainment (48%) and spending on Socializing/Gatherings (46%) are likely to be maintained in 2025. “Consumers are seeking value with every purchase in multiple ways. They are spreading their spending very purposefully—and expect to leverage any excess in strategic ways in 2025 and beyond,” the report maintains. Consumers are willing to spend more but remain conscious of potential changes.
Goldman Sachs Research expects that the Indian economy will be relatively insulated against global shocks over the coming year (including tariffs levied by the new administration of the US). India’s GDP will keep growing strongly in the long term; but with a speed bump next year due to slower government spending and credit growth. Of course, the structural long-term growth story for India remains intact which will be driven by favorable demographics and stable governance. The research predicts that India’s economy to grow at an average of 6.5% between 2025 and 2030. Their 6.3% forecast for 2025 is 40 basis points below a consensus of economists surveyed by Bloomberg.
Headline inflation is expected to average 4.2% year-on-year in the 2025 calendar year, with food inflation at 4.6% (much lower than the estimation of 7%-plus for 2024). Food supply shocks due to weather-related disruptions remain the key risk to this forecast. Core inflation is projected to be around the RBI’s target of 4% year-on-year in 2025, with some possibility that inflation will decline if US tariffs compel Chinese manufacturers to reallocate their products to regional markets.
RBI Rate Cut
The easing cycle from the RBI is likely to be cautious and Goldman Sachs Research expects the RBI to cut rates by 25 basis points in February and then again 25 basis points in April. The key risks to the India growth story are from exogenous shocks, while most observers do not expect India to be a direct target of Trump’s tariff policies, the report says. The IMF predicts that India’s GDP growth will moderate from 8.2% in 2023 to 6.5% in 2025. Oxford Economics says that India’s growth rate has normalized and activity will expand at a softer pace in 2025. In its report ‘India Key Themes 2025: Back to the Old Growth Normal’, Oxford Economics maintains that “Following India’s stunning economic performance in 2023 and the start of 2024, we believe the rate of growth has now normalized and activity will expand at a softer pace in 2025”.
Taking a cue from the IMF’s GDP estimates for 2025 (except Pakistan), the online publisher ‘Visual Capitalist’ maintains that the world economy will be $115 trillion in 2025 and the United States (US), which has been the world’s largest economy for over 100 years, will retain its position ($30.3 trillion) in 2025. The second-largest China ($19.5 trillion) will also hold its position, now on a 15-year streak. The top two countries together will account for over two-fifths (43%) of the world’s $115 trillion GDP. The report also maintains that there have been changes in the top five recently: Germany ($4.9 trillion) overtook Japan ($4.4 trillion) in 2024 as the third-largest economy.
Meanwhile, India ($4.3 trillion) passed the UK ($3.7 trillion) as 5th largest in 2020. All three countries are expected to retain their positions till 2026, when India is projected to first pass Japan for fourth, and then Germany for third place in 2028. The most presumable scenario of the New Year 2025 appears to be an international system that almost will fail to recognize most of the international fabrics construed after the Second World War.
(The writer is a former Senior Project Associate, HSS Department, IIT Kanpur. Views expressed are personal)
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