2025 Economic Outlook: Impact on Treasury

As the global economic landscape continues to shift, treasurers find themselves navigating through uncharted waters. Whilst uncertainty often appears as a threat, it also offers a unique opportunity to reimagine treasury operations, redefine the treasurer’s role, and uncover new avenues for growth. Leveraging lessons from recent global events, treasurers can enhance their organizations' resilience, align more closely with business needs, and secure a competitive edge.

Key Economic Insights for 2025

1. Riding the U.S. Growth Wave Amid Change: The U.S. economy is projected to maintain a steady growth rate in 2025, whilst navigating political change.
2. India and the UK: Bright Growth Spots: India is forecasted to expand by at least 6.5%¹, maintaining its reputation as one of the fastest-growing major economies. Similarly, the UK may join the outperformance story, with a mild acceleration in growth expected. This is driven by additional government spending, rising real incomes, and a drop in interest rates.
3. Steady Growth in China and Hong Kong: With subdued confidence and a still-weak housing sector, stimulus measures in mainland China do not appear to be lifting the growth story materially for now. Growth may be at a slower pace than historical trend. Hong Kong's outlook remains closely tied to the global trade cycle and domestic consumer demand, both of which face current headwinds. Potential easing by the US Federal Reserve and the ongoing stimulus initiatives in mainland China are expected to offer some cushion for the economy in 2025, with growth projected at 2.7%².
4. Eurozone Challenges: The eurozone faces economic headwinds, particularly in Germany, where the industrial sector struggles to maintain competitiveness. Structural reforms may be essential to reinvigorate this key region.
5. Boost in Consumer Confidence: Discretionary spending remains high due to rising real incomes and evolving consumer behaviour. With substantial savings and declining interest rates, consumer spending is expected to cushion growth in many markets.
6. The Global Easing Cycle: Central banks are poised to cut rates by 100-150 basis points³ across most developed economies. This coordinated easing underscores efforts to sustain growth while countering inflation risks.

Based on these economic trends, three key considerations emerge as fundamental to building resilience and driving growth. The evolving role of treasury as a strategic partner, the need to identify and capitalise on growth opportunities, and the imperative to transform treasury operations by embracing data stand out as priorities. Addressing these will enable treasurers to not only mitigate risks but also proactively seize opportunities in the face of economic uncertainty.

Treasury as a Strategic Business Partner

HSBC Global Research expects inflation to remain under control in most economies; however, treasurers should remain vigilant against potential supply shocks, such as fluctuations in energy and food prices, or inflationary pressures resulting from stronger economic growth. According to HSBC’s Corporate Risk Management Survey, compression of operating margins was⁴ the biggest consequence of inflation in the past three years, while higher financing costs are expected to have the highest impact in the next three years. 58% of respondents consider higher inflation as the top macro concern.

In this context, treasurers have an opportunity to evolve into strategic partners, aligning their cash flow and investment decisions with the overarching objectives of the business. Effective communication plays a crucial role in this transition. By fostering closer collaboration with the C-suite and positioning treasury as a key driver of strategy, treasurers can help their organisations navigate uncertainty and strengthen resilience.

Additionally, addressing challenges like FX risk management, the proliferation of global payment methods, and working capital optimisation is critical, particularly for digital business models. According to the HSBC survey⁵, 47% of finance leaders consider their company least prepared to manage FX risk.

The uneven distribution of economic growth globally creates opportunities for treasurers to capitalise on high-growth regions and corridors. Markets such as India, the UK, and China are expected to hold up or improve, supported by anticipated easing of monetary and fiscal policies that are expected to lower borrowing costs and support activity, according to HSBC Global Research. These conditions offer treasurers avenues to fund long-term projects, enabling diversification, and a stronger global presence.

The world is changing, with the rise of new economy models, including platform-based businesses, the gig economy, and the green economy. Furthermore, the digital economy is rapidly expanding and traditional retailers are increasingly adopting direct-to-consumer (D2C) models, offering direct insights into customer behaviour and greater commercial agility. Treasurers have the opportunity to adopt real-time payments, instant payouts, and digital wallets to support their growth in the ever-changing digital economy.

Simultaneously, a broader shift in supply chain dynamics underscore the need to reassess sourcing strategies and bolster resilience. HSBC’s Networks of Tomorrow⁶ survey reveals that counterparty risk, market expansion, and regulatory shifts are the top drivers of corporates’ decision to bring their supply chains closer to the headquarters. Re-shaping supply chains is also an opportunity to bring sustainability centre stage. With total supply chain emissions often exceeding direct emissions tenfold⁷, tackling these issues becomes imperative, as companies face growing scrutiny from stakeholders and regulatory environment becomes tighter.

By proactively engaging with these growth opportunities, treasurers can position their organisations to benefit from emerging market trends while safeguarding operational flows. This dual focus on diversification and risk mitigation will be pivotal in building resilience and supporting sustainable growth.

As economic unpredictability persists, investing in data analytics and forecasting has become imperative for modern treasury functions. Advancements in technology, including data analytics and AI, are redefining treasury operations. Real-time insights are enabling faster decision-making, while innovations in payments infrastructure are enhancing customer experience, increasing visibility, and reducing costs. By integrating fit-for-purpose systems and centralising fragmented operations, treasurers can streamline workflows and better manage increasingly complex transaction volumes.

Emerging technologies such as artificial intelligence (AI) and machine learning are helping to reshape treasury practices. Treasurers are investing in these innovations to optimise risk management, enhance operational efficiency, and discover new growth opportunities. For instance, digital transformation initiatives often include upgrading treasury management systems or implementing tools to meet the demands of higher transaction volumes and seamless payment processing.

Building the treasury of tomorrow also requires addressing skill gaps and resource challenges. According to HSBC’s research, 62% of corporates consider access to talent and skills to use technology as the top challenge around adopting newer technologies in the finance department. Organisations must prioritise training and upskilling teams in areas such as Treasury Management Systems, data analytics, and advanced forecasting. Moreover, unlocking the value of treasury data necessitates a structured approach to data management, ensuring accuracy, accessibility, and alignment with strategic objectives. Resourcing strategies that attract top talent and equip teams with cutting-edge tools will give organisations a competitive advantage in the evolving financial landscape.

By weaving these strategies into treasury operations, organisations can navigate the uncertainties of 2025 and emerge stronger, more resilient, and better equipped to seize opportunities in an ever-changing economic environment.

HSBC’s Treasury Solutions Group (TSG) and Thought Leadership (TL) bring ideas, expertise and experience to businesses wherever they are on their treasury journey. We support treasurers and encourage them to apply these ideas and strategies in practice during their business transformation journeys. To start engaging our Treasury Solutions Group (TSG), contact your HSBC representative.