2025 predictions

A successful democratic transition

Oh boy did I get last year wrong! On the global front, I expected Trump to win. And in Bangladesh, this is what I said:

I expect 2024 to be a ‘less interesting year’ than 2023. The economy will stabilise, and the regime will tighten its grip. There are structural problems in the economy, and the regime has no succession mechanism after Hasina. These things would blow up at some point, but maybe not in 2024.

At least on Bangladesh, the first half of the year was depressingly as I expected.

Then July happened.

Of course, having failed to see the biggest development of our time, dear reader, you should take anything I say below with extreme caution. But that is precisely the point of posts like this, to be transparent with you about so that you can hold me to account.

So, what do I think about Bangladesh in 2025?

I expect a peaceful, democratic transition by next winter. I expect parliamentary elections will happen by then, with an elected government in power before Ramadan of 2026. The elected parliament will pass constitutional amendments to reflect agreements among the key pro-democracy politicians — I expect the agreement to be struck in 2025, but the amendment will have to wait till 2026. I expect the economy to stabilise this year, with a strong recovery underway by the time of the election.

That is, I am optimistic about 2025. The major caveat to this view is that Professor Yunus is 84 and there is no forecasting of life and death!

Globally, while I got Trump wrong, I did get 15 of the other 18 Financial Times questions right for 2024:

• Rights: 2024 was warmer than 2023; there was no full-blown regional conflict in the Middle East; soft landing of the US economy; Keir Starmer in 10 Downing Street; Chinese economic growth of over 3 percent; no war in Taiwan; continued funding of Ukraine; Ursula von der Leyen continues in European Commission; positive official rate by Bank of Japan; ANC losing majority in South Africa; Argentina didn’t dollarise; renewables not overtaking coal globally; investors generally backing bonds; capital market reopening to IPOs; Novo Nordisk ending the year as Europe’s largest company; female pop stars not out earning men (Tay Tay notwithstanding).

• Wrongs: X isn’t bankrupt; Sam Altman was sacked from OpenAI; Britain didn’t return the marbles.

That’s not so bad I guess. But again, I did get the biggest thing wrong.

Let me note my calls on their 2025 questions. I will only offer explanation where my view differs from that of the FT pundit.

• Will Donald Trump start a full-scale tariff war? YES.

• Will there be a peace deal between Ukraine and Russia? YES.

• Will US interest rates end the year lower than now? NO.

• Will Emmanuel Macron survive as French president? YES.

• Will the Magnificent Seven take a fall? YES. Gillian Tett says otherwise, noting the fall will probably come later.

• Will Chinese export prices fall further? YES.

• Will Elon Musk and Donald Trump fall out? YES. Edward Luce differs, but I think the egos will clash sooner rather than later.

• Will Germany relax its debt brake? YES.

• Will the bond market buckle? NO, but I was tempted to say yes — America might experience a fiscal event in the next four years, but probably not in 2025.

• Will China’s carbon emissions fall? NO.

• Will Britain’s Labour government stick to its promise not to raise taxes further? YES.

• Will Israel and the US strike Iran’s nuclear plants? NO.

• Will Bitcoin hit $200,000? NO. Nikou Asgari says the opposite, but come on!

• Will India’s GDP overtake Japan’s? NO.

• Will electric vehicles make up more than a quarter of global auto sales? NO.

• Will Javier Milei lift Argentina’s exchange controls? YES.

• Will the war in Sudan continue? YES.

• Will we have AI agents we can use? YES.

• Will there be another big Hollywood studio deal? YES.

• Will CDs begin a long-term revival similar to vinyl? NO.

Some stuff I read and watched in 2024