"Volkswirtschaftsmonitor" Q1/2025

The global economy developed robustly overall in 2024, driven by strong growth in the USA and China. However, the OECD expects momentum to slow in 2025, particularly due to increasing uncertainties in trade and economic policy. Export-oriented countries with close trade links to the USA are particularly affected.

Despite the economic slowdown, the labor market has remained stable so far. Unemployment rates remain low, although there are slight signs of a slowdown in the form of a decline in job vacancies. Unemployment in Liechtenstein has risen recently, but remains at a low level. The inflation trend remains tense despite the weak economy. In the eurozone and the US, inflation remains above the central banks' target value. The escalating trade conflict is further increasing inflation risks.

The financial markets are reacting sensitively to the high level of uncertainty. While US equities have recently come under heavy pressure, European markets have benefited from fiscal stimulus. The US dollar, which is traditionally considered a safe haven in times of uncertainty, has been surprisingly weak so far. Following a brief appreciation immediately after the US elections, it has fallen significantly in value. The Liechtenstein financial centre remains stable in this environment, although falling interest rates are likely to further dampen profitability in the coming year.

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