260 BMW Group Report 2024 To Our Stakeholders Combined Management Report Group Financial Statements Responsibility Statement and Auditor’s Report Remuneration Report Other Information Outlook The outlook and ↗ Risks and Opportunities of the BMW Group pre- sented in this report reflect the expected development in 2025 from the perspective of Group management. In line with the Group’s performance management, the outlook covers a period of one year. The continuous forecasting process applied within the BMW Group ensures that it is constantly ready to take advantage of opportunities as they arise, but also to react appropriately to any unexpected risks. The principal ↗ Risks and Opportunities are de- scribed in detail in the section of the same name and concern all performance indicators. Actual outcomes may, however, deviate from the outlook due to unexpected events. Economic outlook The International Monetary Fund currently expects the global economy to grow by 3.3% in 2025. The greatest risks include geopolitical developments, trade conflicts and a more gradual loosening of monetary policy. Further information on political and global economic risks is available in the ↗ Risks and Opportunities section. In 2025, the eurozone could see somewhat stronger growth of 1.0% compared to the previous year. The reasons for this are lower inflation, additional moderate cuts in key interest rates and a slight increase in private consumer spending. However, higher tariffs in some countries could weaken growth. Germany’s econ- omy is also expected to expand, albeit at a very low level (+0.3%). Some countries, such as France (+0.7%), Italy (+0.7%) and Spain (+2.4%), are expected to see slightly lower rates of GDP growth than in the previous year. An uptick in economic output (+1.2%) is forecast for the UK due to a fall in interest rates and increased government spending. Bolstered by tax cuts for companies and households and by de- regulation, the US economy is expected to grow by 2.2% in 2025. However, tariff increases and lower immigration could slow the momentum. In China, the government is expected to bolster the domestic economy amid the ongoing real estate crisis and weak domestic demand by instituting more expansive monetary and fiscal poli- cies. Given these conditions, economic growth in 2025 is ex- pected to reach 4.5%. At the People’s Congress, the Chinese government announced a growth target of around 5% in con- junction with further state support measures. Forecasts for Japan’s economy have recently been revised slightly upwards due to a strong fourth quarter in the previous year. However, at +1.2%, overall growth in 2025 is still expected to surpass the previous year’s level. Currency markets and international interest rate environment Currencies of particular importance for the BMW Group’s inter- national operations are the Chinese renminbi, the British pound, the US dollar, the Japanese yen and the South Korean won. In the Eurozone, it is currently assumed that inflation rates will approach the 2% target again. This may lead to further moder- ate key interest rate cuts during the outlook period. However, higher tariffs in some countries could cause inflation to rise again. Inflation in the USA is expected to remain above the target of 2.0% due to higher tariffs and a tight labour market resulting from stricter immigration policies. The US Federal Reserve could therefore lower key interest rates more slowly, which would likely lead to an appreciation of the dollar against the euro. In the UK, too, key interest rates are likely to continue to fall in 2025, and the pound/euro exchange rate is expected to remain stable. In Japan, interest rates are expected to rise slightly in 2025.The yen is likely to remain weak but stable against the euro. Low inflation in China could lead to a more expansionary mone- tary policy on the part of the Chinese central bank, nevertheless, the renminbi is expected to appreciate slightly against the euro. The South Korean won is expected to recover somewhat from its lower level and regain value in 2025. General developments on international automobile markets Global automobile markets could see slight growth in 2025 against the backdrop of favourable economic forecasts. Positive momentum is expected to come mainly from the USA and China, In China, growth in the lower price ranges is expected, as it was in 2024. In Europe, the market for electrified vehicles is expected to grow due to stricter CO2 regulations. However, the BMW Group expects the overall market to decline. International motorcycle markets In 2025, the BMW Group expects the world’s motorcycle mar- kets in the 500 cc plus class to remain stable overall. Europe is likely to see slight growth, while the USA is expected to stabilise. In China, the development of the motorcycle market in the 500 cc plus class is forecast to remain in line with last year’s level. The motorcycle market in Brazil is expected to remain stable in 2025, as in the previous year. OUTLOOK