Cities Key Themes 2025: Cautious optimism
After a challenging year for many cities in 2024, our outlook for 2025 is one of cautious optimism.
Cities from across the world experienced varied growth patterns in 2024, with some showing resilience while others lagged. In 2025, while on average we expect cities in most regions (except China) will see GDP growth accelerate or maintain pace, many will have to navigate a number of different challenges as the shifting geopolitical landscape raises economic uncertainty. Chief among these risks are US President Trump’s proposed tariffs. Although he has made several, headline-grabbing claims to date, it remains to be seen what the extent of these tariffs will be.
Understanding these looming risks will be essential for cities in navigating the rocky road ahead. In this report, we examine the key growth drivers and risks shaping city growth in 2025, addressing the following questions:
- Will major US metros maintain their robust growth? In 2024, the GDP growth of the 50 largest US cities was robust but varied significantly, and we anticipate that this trend will continue into 2025. At the very top of the list for GDP growth in 2025 are San Jose, Orlando, Seattle, and San Francisco.
- Will cities in emerging Asia Pacific continue to outpace global GDP growth rates? We forecast Hyderabad, Bangalore, and Delhi, as well as Ho Chi Minh City to achieve some of the fastest rates of GDP growth globally in 2025. In contrast, cities in advanced Asia will lag. Meanwhile, GDP growth across China’s major cities is predicted to moderate further in 2025, with risks skewed to the downside due to Trump’s threatened US trade tariffs.
- Which cities in Europe will outperform the region’s overall muted growth? GDP growth across the major European cities was moderate in 2024 at 1.7%, and although we forecast a slight improvement for 2025 to 1.8%, the outlook remains muted overall. That said, there will be substantial growth across some cities; central and eastern European cities lead our 2025 rankings, with Warsaw, Prague, Sofia, and Bucharest in the top five.
Alongside the GDP growth for different cities, we also evaluate the prospects for consumer spending and employment opportunities. In the US, many cities have been able to navigate the recent disruptions, ranging from hurricanes to the Boeing strike. We anticipate Salt Lake City, Austin, San Antonio, Riverside, and Dallas to experience the strongest rates of job creation. In APAC region, however, structural issues are coming to the fore, and employment in Nagoya City, Busan, and Seoul is expected to lag.
We also see promising potential for consumer spending growth for global cities in the coming year. US cities, in particular, should post robust rates of growth on the back of additional fiscal stimulus, while European consumers are expected to become less cautious as the fears subside from the higher-than-normal interest rates from 2020–23.
Download the full report for an in-depth analysis, including forecasts for Canadian metros.
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