My Predictions for 2025

Another year has passed. Last year, two of my three predictions for 2024 came true (I reviewed the outcomes in my weekly email newsletter: www.globalisler.com). As we move into 2025, I’ll share three new predictions. But before diving into the forecasts, let’s take a step back to examine the bigger picture and understand global trends shaping our world.

1981, when I was born, China’s economy was only one-fifteenth the size of the European Union’s. Today, the Chinese and EU economies are roughly equal in scale. However, in 1981, the EU had only 10 members; today, it boasts 27. While the EU has expanded, it has also become less efficient. That said, this expansion has significantly benefited the countries that joined. For instance, Poland escaped the middle-income trap within a single generation. Yet, many of these nations’ well-educated young populations are migrating to Western Europe.

Now, let’s compare the EU and the U.S. Since the 2008 global financial crisis, the U.S. economy’s total productivity growth has outpaced the EU’s by 50%. Despite its divisions — conservatives versus liberals, rich versus poor, and racial divides — the U.S. owes this success to its world-class universities. Excellent universities attract talented immigrants, develop transformative technologies, and foster new businesses capable of reshaping the global economy. Over the past 25 years, the U.S. has leveraged these advantages to dominate the digital landscape, creating companies that now hold sway over significant portions of the economy.

As these corporations grow, they also wield increasing influence over American governance. One must grasp the power struggle between sovereign states and these tech giants to understand peculiar events like Instagram’s temporary shutdown in Turkey in 2024. This dynamic will likely intensify in 2025.

Over the past 30 years, China’s growth has demonstrated that economic success is possible outside the Western bloc. This success has two noteworthy dimensions: First, nations with significant economic performance in recent years — China, Singapore, and Gulf states — are not democracies. Second, their capitalist systems operate differently from the West. For instance, China often overinvests in sectors like solar panels and batteries, creating an oversupply that allows it to dominate global markets a decade later. Such long-term strategies are rare in the West’s market-driven economies.

The year 2024 was marked by elections worldwide. Perhaps the most predictable outcome was Donald Trump’s victory in the U.S. presidential race. Conversely, the most unexpected leadership change occurred in Syria. This contrast suggests that democratic regimes are inherently more predictable or that experts have yet to master observing the dynamics of non-democratic states.

Looking ahead, Trump’s presidency reflects a straightforward philosophy: “America First!” He prioritizes domestic issues over global concerns, signaling a return to the country’s pre-1942 original stance of isolationism. Watch the Netflix documentary Churchill at War for a historical refresher on America’s inward focus before World War II, highlighting Winston Churchill’s efforts to persuade President Franklin Roosevelt to join the war.

One intriguing aspect of Trump’s second term is his close alliance with “tech bros.” This term describes male tech entrepreneurs who prioritize work above all else, celebrate competition and hard work, and believe technology will make them wealthy and save the world. Elon Musk epitomizes this archetype and now rarely leaves Trump’s side. As Trump appoints more tech bros to key roles in his administration, the U.S. will likely become even more insular under their influence.

Now, let’s zoom in from the macro to the micro perspective. Against a backdrop of an inward-looking U.S., a China that challenges the liberal values of Western civilization, and an economically struggling Europe, here are my predictions for 2025:

• Growing instability and declining trust in U.S. alliances will drive higher defense budgets in Europe and the Middle East. This trend presents significant opportunities for Turkey’s defense sector. I’ve previously identified defense, climate, and AI technologies as key investment areas for this era. I predict that Turkey will produce its first defense-sector unicorn in 2025. Let’s see which company achieves this milestone.
• Geopolitical pressures are pushing Chinese manufacturers to relocate some operations abroad. Turkey will benefit as Chinese firms, like BYD, continue establishing overseas production facilities. This shift will likely result in a twofold increase in Chinese direct investments in Turkey by the end of 2025.
• Whether through a tweet or sudden silence, I expect the camaraderie between Donald Trump and Elon Musk to dissolve before 2025 concludes. Regardless of how their relationship unfolds, the tech bro ethos will maintain its dominance within the U.S. government, further amplifying the influence of American digital corporations worldwide.

In conclusion, emerging opportunities and challenges will shape the global landscape in 2025. Leveraging these dynamics will require agility, innovation, and strategic foresight for Turkey. The year promises significant developments, and I’ll watch how they unfold.

This article is a translated version of which was “2025 tahminlerim” initially published in Economic Daily (Nasıl Bir Ekonomi Gazetesi) on January 03, 2025.