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Gift Card Market to Reach USD 1,897.46 Billion Globally by 2030, Driven by Digital Adoption and Corporate Gifting | Credence Research Inc.
PUNE, India, Nov. 21, 2024 /PRNewswire/ — The global gift card market, valued at USD 818.52 billion in 2022, is projected to reach USD 1,897.46 billion by 2030, growing at a CAGR of 10.46%. Key drivers include the rising adoption of digital gift cards and increased corporate gifting initiatives.
Gift Card Market Size and Forecast
Growing Market Demand for Gift Cards
The global gift card market is poised for substantial growth, driven by the increasing shift toward cashless transactions and rising consumer demand for flexible gifting options. According to a report published by Credence Research titled “Gift Cards Market By Material Merchant Type (Restaurants, Department Stores, Grocery Stores, Supermarkets/Hypermarkets, Discount Stores, Coffee Shops, Entertainments, Salons/Spa, Book Stores, Home Décor Stores, Gas Stations, Visa/Master Card/American Express Gift Cards, Others) By Merchant Type (Universal Accepted Open Loop, Restaurant Closed Loop, Retail Closed Loop, Miscellaneous Closed Loop, E-Gifting) By End User – Growth, Future Prospects and Competitive Analysis, 2022 – 2030” In 2022, the market was valued at approximately USD 818.52 billion and is projected to reach USD 1,897.46 billion by 2030, reflecting a CAGR of 10.46% over the forecast period. The surging popularity of digital gift cards, particularly those integrated with e-commerce platforms, plays a pivotal role in this expansion. Additionally, businesses are leveraging gift cards as effective marketing tools to enhance customer loyalty and retention. Seasonal and holiday purchases, coupled with corporate gifting programs for employee rewards, continue to drive significant revenue growth in this sector.
Regional Insights and Future Opportunities
North America dominates the global gift card market, attributed to its advanced digital payment infrastructure and widespread adoption of e-commerce. However, the Asia-Pacific region is expected to witness the fastest growth due to increasing smartphone penetration, digital payment adoption, and expanding middle-class consumer bases in countries like India and China. Innovations such as customizable and reloadable gift cards, along with blockchain-based solutions ensuring security and transparency, are creating lucrative opportunities for market players. Challenges, such as fraud and lack of awareness in emerging markets, remain but are being addressed through technological advancements and regulatory frameworks.
Dive deeper into market insights, growth drivers, and key trends by browsing the comprehensive report. Click here to access the full report- https://www.credenceresearch.com/report/gift-cards-market
Gift Card Market Drivers
The Rise of Digital Payment Solutions Driving the Gift Card Market
The increasing adoption of digital payment systems is a key driver for the gift card market. For instance, a study found that the usage of digital payments increased by nearly 30% in 2022, driven by the convenience and speed of cashless transactions. Consumers are gravitating toward cashless transactions due to their convenience, speed, and security, making digital gift cards an attractive choice. According to a survey, 75% of respondents preferred digital gift cards over physical ones because of their ease of use and instant delivery. Their compatibility with e-commerce platforms and mobile wallets has further boosted their popularity, with digital wallets accounting for 45% of all online transactions in 2023
Gift Cards as a Preferred Tool for Corporate Rewards and Loyalty Programs
Corporates are increasingly leveraging gift cards as part of their employee reward programs and customer loyalty initiatives. For instance, a survey revealed that 79% of employees work harder when they feel recognized, and gift card programs offer a simple, impactful way to make that recognition felt. These cards provide flexibility and personalization, making them a cost-effective way to incentivize employees and retain customers. Additionally, companies have reported a 25% increase in employee satisfaction and engagement when using gift cards as rewards. Their ease of distribution and the ability to tailor them to individual preferences make gift cards an effective tool for driving market growth.
The Role of E-Commerce in Boosting Gift Card Demand
The rapid expansion of e-commerce has significantly contributed to the growth of the gift card market. For instance, during the pandemic, digital gift card sales surged by 80% year-over-year as consumers increasingly turned to online shopping to avoid crowds. Digital gift cards, in particular, have become integral to online shopping experiences, allowing consumers to make purchases or send gifts conveniently. A survey found that 92% of respondents preferred digital gift cards for their flexibility and ease of use, further enhancing their demand. Additionally, digital gift cards have been shown to drive repeat business and foster customer loyalty through personalized experiences.
Seasonal and Holiday Purchases Influencing the Gift Card Market
Seasonal and holiday shopping trends are major drivers of the gift card market. Consumers prefer gift cards for their flexibility and ease of use during festive seasons, boosting their demand. Retailers also capitalize on this trend through promotional campaigns, further fueling market growth.
Technological Advancements Transforming the Gift Card Industry
Innovations such as blockchain-based solutions and customizable, reloadable gift cards are revolutionizing the gift card market. These advancements enhance security, transparency, and personalization, making gift cards more appealing to both consumers and businesses.
Gift Card Market Restraints
Fraud Challenges in the Gift Card Market
Fraud remains a significant concern for the gift card market, with cybercriminals targeting both physical and digital gift cards. Techniques such as phishing, code hacking, and unauthorized use compromise consumer trust and lead to financial losses for businesses. The lack of advanced security measures in some gift card systems exacerbates this issue, hindering market growth.
Limited Awareness in Emerging Markets Restraining Market Expansion
In many developing regions, limited awareness about gift card benefits and functionality restricts market penetration. Consumers in these areas often prefer traditional gifting methods, and the absence of widespread digital infrastructure further impedes adoption. This creates a significant barrier to growth for gift card providers in untapped markets.
Lack of Standardization Hindering the Gift Card Industry
The absence of standardized regulations for gift card issuance and usage across regions creates challenges for market players. Differences in redemption policies, expiration terms, and fees confuse consumers and diminish their willingness to adopt gift cards. These inconsistencies also deter cross-border transactions, restricting the global scalability of gift card programs.
Impact of High Transaction Fees on Gift Card Usage
Transaction fees associated with gift cards, particularly reloadable or prepaid variants, can discourage consumers and businesses from using them. These fees, often perceived as hidden costs, reduce the overall value of gift cards, making them less appealing compared to other gifting or payment options.
Redemption Restrictions Limiting Market Growth
Redemption restrictions, such as limited acceptance at specific retailers or within certain timeframes, frustrate consumers and undermine their trust in gift cards. Such constraints reduce the flexibility that makes gift cards attractive, ultimately curbing their widespread adoption and market growth.
Gift Market Segmentation Analysis
By Material Merchant Type
The global gift card market is segmented by material merchant type into various categories based on the type of retailer or service provider. Restaurants and coffee shops dominate this segment as popular choices for both personal and corporate gifting due to their wide appeal and usability. Department stores, supermarkets/hypermarkets, and grocery stores cater to everyday consumer needs, making them a practical option for recipients. Specialized categories such as entertainments, salons/spa, book stores, and home décor stores appeal to niche markets. Gas stations gift cards provide convenience for daily commuting, while cards like Visa, MasterCard, and American Express gift cards offer flexibility for various purchases, further enhancing their demand.
By Merchant Type
This segment categorizes gift cards into different types based on their usability. Universal Accepted Open Loop gift cards, such as those issued by financial institutions (Visa, MasterCard), are highly versatile and widely used for a variety of transactions. Closed Loop Cards, which include restaurant closed loop, retail closed loop, and miscellaneous closed loop, are restricted to specific merchants, offering targeted usability for dining, shopping, or services. The rise of E-Gifting, driven by digital adoption, provides a convenient and instant option, appealing particularly to younger demographics and tech-savvy users.
By End User
Based on end-user segmentation, the market caters to businesses and individuals. Businesses are significant contributors, using gift cards for employee rewards, client appreciation, and promotional campaigns. On the other hand, individuals use gift cards primarily for gifting purposes on occasions such as birthdays, anniversaries, or holidays, making them a versatile and practical choice.
By Price Range
Gift cards are segmented by price range into high (above $400), medium ($200–$400), and low (below $200) categories. High-priced gift cards are predominantly used in corporate settings for high-value gifting or rewards. Medium-range gift cards are common for personal gifting and special occasions, while low-priced gift cards are popular for everyday gifting, promotions, and smaller incentives. This price range segmentation ensures accessibility across diverse consumer and corporate needs.
Segmentation of Global Gift Cards Market-
Global Gift Cards Market – By Material Merchant Type
- Restaurants
- Department Stores
- Grocery Stores
- Supermarkets/Hypermarkets
- Discount Stores
- Coffee Shops
- Entertainments
- Salons/Spa
- Book Stores
- Home Décor Stores
- Gas Stations
- Visa/Master Card/American Express Gift Cards
- Others
Global Gift Cards Market – By Merchant Type
- Universal Accepted Open Loop
- Restaurant Closed Loop
- Retail Closed Loop
- Miscellaneous Closed Loop
- E-Gifting
Global Gift Cards Market – By End User
- Business
- Individuals
Global Gift Cards Market – By Price Range
- High (Above 400 US$)
- Medium (200-400 US$)
- Low (0-200 US$)
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Regional Analysis
North America
North America dominates the global gift card market, driven by advanced digital payment infrastructures, high consumer spending power, and widespread adoption of e-commerce. The United States is the leading contributor in this region, with businesses heavily utilizing gift cards for employee rewards and customer loyalty programs. The rise of digital gift cards, particularly those integrated with popular e-commerce platforms and digital wallets, has further fueled market growth. Seasonal and holiday sales contribute significantly to revenue generation, making North America a mature and robust market for gift cards.
Europe
Europe represents a significant share of the global gift card market, with countries such as the United Kingdom, Germany, and France leading the region. The increasing adoption of e-commerce and digital payment solutions has bolstered the demand for digital gift cards. The corporate sector also plays a pivotal role, with businesses leveraging gift cards to enhance employee engagement and customer loyalty. Additionally, cultural traditions of gifting during holidays and special occasions further drive market growth in this region.
Asia-Pacific
The Asia-Pacific region is experiencing the fastest growth in the gift card market, fueled by increasing smartphone penetration, rising disposable incomes, and rapid digitalization in countries like China, India, and Japan. The growing popularity of e-commerce platforms and mobile payment systems has significantly boosted the adoption of digital gift cards. Furthermore, the expanding middle-class population and their preference for flexible gifting options are driving market growth. Localized promotional campaigns by retailers and global brands also contribute to the rising popularity of gift cards in this region.
Latin America
Latin America’s gift card market is growing steadily, driven by urbanization and increasing adoption of digital payment systems. Countries like Brazil and Mexico are leading the market, with retailers and e-commerce platforms promoting the use of gift cards for various occasions. The region’s younger population is particularly inclined toward digital gift cards due to their convenience and integration with online shopping platforms.
Middle East & Africa
The Middle East and Africa are emerging markets for gift cards, supported by increasing urbanization and the growing use of smartphones and digital payment systems. Countries such as the UAE and South Africa are key contributors, with rising e-commerce penetration and expanding retail sectors. Gift cards are also gaining traction as a tool for corporate rewards and promotions, although limited digital infrastructure in certain areas poses a challenge to market growth.
Top Companies –
- Apple, Inc.
- The Up Group
- Best Buy Company, Inc.
- Amazon.com, Inc.
- Starbucks Corporation
- Walmart Stores
- National Gift Card Corporation
- Edge Loyalty Systems Pty. Ltd.
- Target Corporation
- InComm
- QwickSilver Solutions
- Gyft
- Blackhawk Network holdings, Inc.
- Edenred Group.
Competitive Landscape
The global gift card market is highly competitive, with major players ranging from technology giants to specialized providers of loyalty and reward solutions. Companies are focusing on innovative product offerings, strategic collaborations, and technological advancements to maintain their market position and address growing consumer demands.
Key Players and Their Strategies
Prominent companies in the market include Apple, Inc., Amazon.com, Inc., Starbucks Corporation, Walmart Stores, Target Corporation, and Best Buy Company, Inc. These companies dominate due to their expansive retail networks, strong digital ecosystems, and widespread consumer trust. For instance, Apple and Amazon lead in digital gift cards by integrating them seamlessly with their ecosystems, enhancing user experience and driving sales. Similarly, Starbucks leverages its gift card programs to boost customer loyalty through innovative features such as reloadable cards linked to its rewards program.
Specialized Providers and Emerging Players
Specialized gift card companies, such as National Gift Card Corporation, Blackhawk Network Holdings, Inc., Edenred Group, Edge Loyalty Systems Pty. Ltd., and InComm, play a crucial role in the market by offering tailored solutions for corporate gifting, loyalty programs, and digital payment services. Companies like QwickSilver Solutions and Gyft are emerging as key players in the digital gift card space, focusing on e-gifting and mobile integration to cater to tech-savvy consumers.
Focus on Digital Transformation
The shift toward digital gift cards has intensified competition, with players developing advanced platforms for seamless gifting and redemption. InComm and Blackhawk Network are at the forefront of this trend, offering platforms that connect retailers with consumers and enable cross-platform gift card usage. Edge Loyalty Systems Pty. Ltd. focuses on corporate rewards and consumer engagement programs, enhancing its value proposition in the B2B segment.
Collaborations and Strategic Partnerships
Collaborations and partnerships remain key strategies for market expansion. For instance, companies like National Gift Card Corporation and Edenred Group partner with retailers and financial service providers to offer diversified and universally accepted gift card solutions. These partnerships enable businesses to tap into new customer segments and drive market growth.
Opportunities and Challenges
While the market presents significant opportunities through digital innovation and emerging markets, challenges such as fraud, regulatory inconsistencies, and lack of consumer awareness in certain regions persist. Companies are addressing these issues by adopting blockchain technology, enhancing security measures, and conducting awareness campaigns. With increasing consumer preference for convenience and personalization, the market is poised for robust growth driven by innovation and strategic initiatives.
Latest Developments:
- February 2024: Roblox, a global platform for immersive communication and engagement, partnered with Blackhawk Network (BHN) to offer digital gift cards in Austrian Euro (EUR), Belgian Euro (EUR), Swiss Franc (CHF), and Brazilian Real (BRL) on its gift card website, Roblox.com/giftcards. This initiative enables customers in these nations to purchase Roblox digital gift cards in their local currencies.
- December 2023: Pine Labs’ Qwikcilver, a leading provider of gift card and stored value solutions in Southeast Asia and India, collaborated with Foodpanda, Asia’s largest food and grocery delivery network (excluding China), to launch Foodpanda Gift Cards. These cards provide customers with a convenient way to redeem and complete purchases.
- September 2023: Razorpay, a domestic payments and banking platform, introduced the D2C GRO Suite at the D2C Sparkx 2023 event. This suite aims to address e-commerce lifecycle challenges, including enhancing purchase experiences, preventing fraud, and enabling seamless checkouts. Razorpay claims the tools will help over 2.5 lakh e-commerce and direct-to-consumer brands increase sales by 50%.
- July 2022: American Express, in partnership with the National Trust for Historic Preservation, announced grant funding of USD 1 million for 25 historic independent restaurants across the U.S. through the “Backing Historic Small Restaurants” program.
- June 2022: Blackhawk Network partnered with Restaurant.com to expand the distribution of the dining deal site’s gift card program, including new eGift options available through GiftCardMall.com and other digital platforms via Blackhawk’s distribution network.
- June 2022: Blackhawk Network collaborated with LibertyX to make cryptocurrency more accessible, allowing consumers to purchase Bitcoin through LibertyX accounts at select U.S. merchants, including Fresco y Más, Harveys Supermarkets, and Winn-Dixie.
- April 2022: Blackhawk Network teamed up with Bitski, an NFT and blockchain wallet leader, to launch the world’s first NFT promotion gift card. The offering combines real-world and Web3 value, bridging traditional and digital economies.
- February 2022: Blackhawk Network expanded its partnership with Kroger to provide Mastercard® and Visa® bulk prepaid cards via its Velocity B2B SaaS-based gift card services. This supports Kroger’s growth in the B2B gift card sector by offering businesses a robust tool for employee rewards and charitable efforts.
- April 2022: eCard Systems extended its partnership with Toast, enhancing restaurant businesses through customer insights, loyalty programs, and multi-channel marketing solutions designed to boost engagement and growth.
- August 2021: eCard Systems partnered with Paytronix to equip merchants with tools and data to optimize gift card programs. The collaboration aims to foster stronger customer connections and facilitate business expansion.
- April 2021: Thoughtworks launched a gift card initiative to help retailers leverage technology for improved customer engagement. The cards act as entry points into integrated payment and ordering systems, promoting customer loyalty and spending habits.
- July 2020: Apple Inc. introduced a universal gift card for hardware, software, and services, designed to meet diverse consumer needs. Branded as “for everything and everyone,” it provides flexibility across Apple’s product portfolio, reinforcing its position as an innovative market leader.
Reasons to Purchase this Report:
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The launch of SynFutures Foundation and F signifies SynFutures’ progress toward decentralization, enabling its community to govern the protocol.
HONG KONG, Dec. 3, 2024 /PRNewswire/ — SynFutures (www.synfutures.com), a leading decentralized exchange for trading any asset with leverage and a full stack financial infrastructure provider, today announced the launch of SynFutures Foundation and the F token airdrop. Crypto exchanges including Bybit, Bitget, Gate.io, and KuCoin have confirmed the listing of the F token upon launch. This marks the beginning of SynFutures decentralizing its ecosystem and transitioning governance power to its community.
SynFutures has become a key player in the onchain derivatives ecosystem since its v3 launch on Base and Blast earlier in 2024. Its v3 protocol, powered by the Oyster AMM, has recorded over $210 billion in trading volume since launch, making it the largest perp DEX on Base and the third largest across all EVM and non-EVM chains.
The launch of SynFutures Foundation and F marks the next step in SynFutures’ successful journey toward creating an open, permissionless, and decentralized financial infrastructure for everyone.
Transitioning power to the community
The SynFutures Foundation, alongside the community, will oversee development, foster partnerships, and drive community-led governance to ensure a truly permissionless financial ecosystem. This includes initiatives such as project collaborations, grants and funding for third-party developers, community initiatives, hackathons, and similar programs.
The F token, based on Ethereum Mainnet, accords the SynFutures community with governance rights while offering benefits such as fee discounts, staking rewards, and future airdrop boosts. With 10 billion tokens allocated strategically across Community, Backers and Advisors, Foundation Treasury, Core Contributors, Protocol Development, and Liquidity, F represents a fair and balanced approach to rewarding early supporters and community members and ensuring sustainable growth.
The project has allocated 28.5% of its total F supply toward the Community. A part of this allocation, equivalent to 7.5% of the total supply, will be distributed as part of the Season 1 Airdrop on December 6, 2024, to reward users who engaged consistently with SynFutures v1 to v3.
SynFutures used various parameters to assess users’ eligibility for the Season 1 airdrop, including trading activities on v1 and v2 and points accumulation through trading on v3. Long-term and active users who have consistently traded on multiple versions of the SynFutures protocol will be eligible for a bonus. Early adopters will also be rewarded with a portion of the airdrop.
Between December 2 to December 5, users can participate in Bybit’s launchpool to earn F tokens prior to token listing. Users can also participate in staking on Gate.io to earn a portion of 75,000 $F tokens on launch day.
“Since day one, decentralization has been at the heart of SynFutures’ mission. With the Foundation and F token, we’re a step closer to that milestone and are empowering the community to shape the protocol’s future,” said Rachel Lin, Co-Founder & CEO of SynFutures.
Building a full-stack DeFi solution
One of the biggest milestones for SynFutures going forward is expanding its onchain financial services and building a community-centric full-stack finance ecosystem. It will expand its offerings beyond perp trading and gradually add more services including spot aggregation, and wealth management, among others.
About SynFutures
SynFutures (F) is a leading decentralized exchange and full-stack financial infrastructure provider. Utilizing its innovative Oyster AMM model and a fully onchain order-matching engine, SynFutures enables anyone to list and trade any asset with leverage. As the top perpetual futures DEX on multiple networks like Base, it introduced the industry’s first Perp Launchpad, attracting bluechips, memecoins, and more.
Backed by top-tier institutions like Pantera, Polychain, Dragonfly, Standard Crypto, Framework, and SIG, SynFutures is building an all-in-one platform for spot, perpetual, and wealth management, streamlining DeFi for all.
To learn more, visit www.synfutures.com
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A GLOBAL LEADER IN UNSATURATED POLYESTER RESINS,
VINYL ESTER RESINS AND GELCOATS
NEW YORK, Dec. 3, 2024 /PRNewswire/ — KPS Capital Partners, LP (“KPS”) announced today that, through a newly formed affiliate, it has signed a definitive agreement to acquire INEOS Composites (the “Company”) from INEOS Enterprises Holdings II Ltd (“INEOS Enterprises”) for an estimated consideration of approximately €1.7bn at completion. Completion of the transaction is expected in the first half of 2025 subject to regulatory approvals and consultation processes (in particular, with respect to the French business, for which the parties have entered into exclusive negotiations).
INEOS Composites is a leading global manufacturer of unsaturated polyester resins, vinyl ester resins and gelcoats used in the production of plastic composites for a wide range of applications across large global end-markets, including building materials, recreation, transportation and wind energy, among others. INEOS Composites sells a broad range of resins that allow customers to optimize certain characteristics of their products, including corrosion resistance, fire retardance, ultraviolet resistance, water and chemical resistance, thermal and electrical insulation, impact and scratch resistance, and high strength-to-weight ratios. Headquartered in Dublin, Ohio, and Barcelona, Spain, INEOS Composites has approximately 900 employees and operates 17 manufacturing facilities and three technology centers across North and South America, Europe, Asia and the Middle East.
Raquel Vargas Palmer, Managing Partner of KPS, said, “We are thrilled to acquire INEOS Composites, a leading global manufacturer of specialty composite resins. The Company’s leading market position and long-tenured customer base is a testament to its differentiated product quality, reliability and strong technical service capabilities. We will leverage KPS’ successful, multi-decade experience of investing in process industries, along with our commitment to manufacturing excellence and global network, to drive profitability and create an entrepreneurial culture centered on innovation, continuous improvement and superior customer experience. We look forward to partnering with Chief Executive Officer Andrew Miller and the INEOS Composites team to accelerate the Company’s value creation opportunities.”
Andrew Miller, Chief Executive Officer of INEOS Composites, said, “We are excited for our future as an independent company under KPS’ ownership. KPS is an ideal partner, given its demonstrated track record of establishing and growing world-class industrial companies. KPS’ commitment to manufacturing excellence, capital investment, and research and development, accompanied by its global platform and significant capital resources, will elevate our ability to provide customers with industry-leading products and superior service.”
Ashley Reed, Chairman of INEOS Enterprises said, “Composites has been part of INEOS Enterprises for the past five years, during which time it has achieved significant improvements in safety and financial performance. Furthermore, it has solidified its market position through enhanced product quality, consistency, and strengthened operational and commercial capabilities, ensuring a strong foundation for further future growth.”
Paul, Weiss, Rifkind, Wharton & Garrison LLP served as legal counsel to KPS. Piper Sandler served as financial advisor and Slaughter and May acted as legal counsel to INEOS Enterprises. Committed debt financing to support the transaction has been provided by Goldman Sachs Bank USA, Barclays, Citi, Intesa Sanpaolo – IMI CIB Division and MUFG Bank.
About INEOS Composites
INEOS Composites is a leading global manufacturer of unsaturated polyester resins, vinyl ester resins and gelcoats used in the production of plastic composites for a wide range of applications across large global end-markets including building materials, recreation, transportation and wind energy, among others. INEOS Composites sells a broad range of resins that allow customers to optimize certain characteristics of their products, including corrosion resistance, fire retardance, ultraviolet resistance, water and chemical resistance, thermal and electrical insulation, impact and scratch resistance, and high strength-to-weight ratios. For more information about INEOS Composites, visit www.ineoscomposites.com.
About KPS Capital Partners, LP
KPS, through its affiliated management entities, is the manager of the KPS Special Situations Funds, a family of investment funds with approximately $21.4 billion of assets under management (as of September 30, 2024). For over three decades, the Partners of KPS have worked exclusively to realize significant capital appreciation by making controlling equity investments in manufacturing and industrial companies across a diverse array of industries, including basic materials, branded consumer, healthcare and luxury products, automotive parts, capital equipment, and general manufacturing. KPS creates value for its investors by working constructively with talented management teams to make businesses better and generates investment returns by structurally improving the strategic position, competitiveness, and profitability of its portfolio companies, rather than primarily relying on financial leverage. The KPS Funds’ portfolio companies currently generate aggregate annual revenues of approximately $23.7 billion, operate 251 manufacturing facilities in 30 countries, and have approximately 65,000 employees, directly and through joint ventures worldwide (as of September 30, 2024, pro forma for recent acquisitions). The KPS investment strategy and portfolio companies are described in detail at www.kpsfund.com.
About INEOS Enterprises
INEOS Enterprises comprises a portfolio of businesses manufacturing chemical products in Northern Europe, the USA and Canada, with sales of €2.7bn around the world. The business is focused on the developing needs of its customers and rapid growth through investment in new products and manufacturing facilities or by acquisition. It employs c. 3,100 people across sites in the UK, Germany, Sweden, Switzerland, Canada and the USA. INEOS Enterprises is not part of the INEOS Group Holdings bank group. Visit www.ineosenterprises.com to learn more.
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Fintech PR
BofA Global Research Expects 2025 to be a Year of Further Equity Market Strength Amid Macro Uncertainty
BofA Economists and Strategists Forecast the US Economy to Continue to Outperform and the S&P 500 to Reach 6666 by Year-end
NEW YORK, Dec. 3, 2024 /PRNewswire/ — While we await key details on policy changes in the US, indications thus far suggest the outlook for 2025 could present big opportunities for investors. The US economy is on strong footing, with growing signs of a pickup in productivity growth as we head into the new year. In their newly released outlook for 2025, BofA Global Research economists and strategists expect US economic and earnings growth to outpace that of other developed economies, while US equities should start the year off strong and end 2025 with the S&P 500 at 6666. Policy changes, including tariffs, tax policy, and the regulatory environment, should have almost as much impact on the rest of the world as they will for the US. As the year progresses, international opportunities should present themselves: European stocks are forecasted to slow but rebound to current levels by year-end 2025, and in China, domestic stimulus measures should offset any slowdown brought on by changes to trade policies.
“In 2024, growth surprised to the upside and inflation moved in the right direction, allowing central banks to start easing, risk assets to perform well, and global equities to reach new highs,” said Candace Browning, head of BofA Global Research. “But as we head into 2025, policy uncertainty has increased substantially. Many of the expected policy shifts should be positive for US equities, but a lot depends on their timing and how the rest of the world responds.”
Key macro calls made for the markets and economy in the year ahead are:
- Further upside for the S&P and it could come quickly: Head of US Equity Strategy Savita Subramanian expects more than 10% upward potential for the S&P and earnings growth to accelerate to 13% in 2025.
- Improved US productivity should help economic growth, but policy changes should play a critical role for US and rest of world: Senior US economist Aditya Bhave estimates US GDP growth to come in at 2.4% year-over-year (yoy) in 2025 and 2.1% yoy in 2026, which is above consensus partly due to improved productivity. A new mix of fiscal policies may be more supportive of US economic growth vs the rest of the world.
- Fed expected to cut twice before pausing; US bond yields should remain in a tight range: In 2025, Bhave and team expect the Federal Reserve to cut interest rates by 25 basis points at its March and June meetings and then pause. Mark Cabana, head of US Rates Strategy, expects a relatively tight trading range for the US 10-year Treasury yield, around 4-4.5%.
- Key commodity prices, including oil, expected to soften: Francisco Blanch, head of Commodities and Derivatives Research, expects commodity demand growth to weaken, particularly on raw materials. Macro fundamentals suggest markets in 2025 will be oversupplied for oil and grains but more finely balanced for metals. After facing headwinds early in the year, gold should peak at $3,000 per ounce.
- USD strength through 1H25 but then growth concerns lead to depreciation: Alex Cohen, senior FX strategist, expects the US Dollar to remain strong into the first half of 2025, around which time upside drivers should wane amid a less certain policy and growth outlook.
- Emerging Markets assets face a short-term risk, then likely improvement: Head of Global Emerging Markets Fixed Income Strategy David Hauner says that uncertainty about US policy is likely to send emerging markets lower, but investors may find a buying opportunity once there is more clarity on trade policy, especially if the US dollar peaks.
- US Cyclicals should outperform: Subramanian expects cyclical strength in 2025 for a variety of reasons, including the Republican sweep, productivity cycle, decades of underspending in manufacturing and light positioning in cyclicals.
- Demand for credit remains exceptionally strong: Our Credit Research team expects strong positive total returns for credit in developed markets next year, the third year in a row of strong performance.
- Expect Chinese growth to weaken but easing to offset tariff impact: Helen Qiao, greater chief China economist and head of Asia Economics, expects real GDP growth for China to decelerate to 4.5% yoy in 2025 and domestic demand stimulus to offset any impact from tariffs with a lag.
- Euro area equity market to see downside through mid-year, then a recovery. Sebastian Raedler, head of European Equity Strategy, expects 7% downside to the Stoxx 600 followed by a recovery close to current levels.
BofA Global Research
The BofA Global Research franchise covers approximately 3,500 stocks and 1,250 credits globally and ranks in the top tier in many external surveys. Most recently, the group was named No. 2 Global Research Firm of 2023 by Institutional Investor magazine; No. 1 in the 2024 Institutional Investor Developed Europe survey; No. 1 in the 2024 Emerging Europe, Middle East & Africa survey; No. 2 in the 2024 Institutional Investor All-America survey; and No. 2 in the 2023 Institutional Investor Global Fixed-Income Research survey. For more information about any awards cited, visit https://rsch.baml.com/awards.
Bank of America
Bank of America is one of the world’s leading financial institutions, serving individual consumers, small and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. The company provides unmatched convenience in the United States, serving approximately 69 million consumer and small business clients with approximately 3,700 retail financial centers, approximately 15,000 ATMs (automated teller machines) and award-winning digital banking with approximately 58 million verified digital users. Bank of America is a global leader in wealth management, corporate and investment banking and trading across a broad range of asset classes, serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to approximately 4 million small business households through a suite of innovative, easy-to-use online products and services. The company serves clients through operations across the United States, its territories and more than 35 countries. Bank of America Corporation stock is listed on the New York Stock Exchange (NYSE: BAC).
For more Bank of America news, including dividend announcements and other important information, visit the Bank of America newsroom and register for news email alerts.
Reporters may contact:
Melissa Anchan, Bank of America
Phone: 1.646.532.9241
[email protected]
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