Annual Economic Forecast Paints a Murky Picture of Uncertainty for 2025

The Old Dominion University (ODU) released its annual economic forecast on Tuesday, projecting a year of sluggish growth and heightened uncertainty for the US economy in 2025. Economists cite rising interest rates, geopolitical tensions, and consumer spending slowdowns as key factors dampening economic prospects.

The report anticipates GDP growth of around 1.5%, a significant decline compared to pre-pandemic averages.

“The economy is still in recovery mode, but headwinds like inflationary pressures and global instability are creating an unpredictable environment,” said an ODU economist.

Key sectors such as housing and retail are expected to experience stagnation, with elevated mortgage rates suppressing demand. Meanwhile, defense spending and the health care industry may provide some stability in regions like Virginia, where the military and health sectors play a pivotal role.

The forecast urges businesses and policymakers to prepare for a volatile year, emphasizing the importance of adaptability in navigating economic uncertainty. As the US enters 2025, questions about the Federal Reserve’s monetary policy and the global economy’s trajectory will loom large over decision-making.