Economic environment

The global economy once again presented a mixed picture in 2025. Manufacturing industry remained weak, particularly in Europe, where Germany, France and Austria continued to be hampered by structural problems. However, the situation in the services sector has stabilised: the PMI for the eurozone stood at around 53 points in the summer. Growth of around 1.3 per cent is expected for the eurozone in 2025, driven by Spain (just under 3 per cent), France (1.2 per cent) and Italy (1.0 per cent). Germany showed a moderate recovery, Austria a slight increase of around 0.5 per cent after the decline in 2024.

Monetary policy conditions remained supportive. The ECB lowered its key interest rates four times, each time by 25 basis points, taking it down to 2 per cent. Inflation in the eurozone was around 2 per cent at the end of the year but significantly higher in Austria. In addition to political uncertainties in core EU countries, the unresolved Ukraine conflict and US tariff policy had a negative impact. Despite these factors, the labour market remained stable; no increase in unemployment was observed in the eurozone in 2025. The discussion about compliance with the Maastricht criteria once again put pressure on highly indebted member states and weighed on economic sentiment.

The US economy expanded by around 2 per cent in 2025, fuelled by robust consumer spending. Inflation fell more slowly than expected and stood at 2.5 per cent, while the Federal Reserve lowered the Fed Funds Target Rate to the upper limit of the target range of 3.75 per cent. The implementation of new US tariffs under President Trump created additional uncertainty and had a dampening effect on global trade.

In China, the situation in the industrial sector remained tense. The property market continued to deteriorate, with unfinished projects and weak sales markets weighing on activity. The government responded with an export offensive, often flanked by aggressive pricing strategies.

The bond markets were volatile in 2025 but stabilised towards the end of the year. Austrian ten-year government bonds yielded around 3 per cent over the course of the year. Spreads on Italian bonds developed solidly, while French bonds lagged slightly behind due to the significant increase in debt.

The global equity markets continued their upward trend in 2025, with the European equity markets clearly outperforming other regions of the world. The S&P 500 rose by just 4.5 per cent due to the fall in the dollar, and the MSCI World rose by 6 per cent, whereas the DAX grew by 23 per cent and the ATX by 51 per cent.