Jim Walker, Chief Economist at Aletheia Capital, renowned for accurately predicting the 2008 financial crisis, has outlined four key global forecasts for 2025. In an interview to a media organisation, Walker projected a 10% decline in the U.S. dollar, an economic slowdown that, while challenging, will remain manageable, an optimistic long-term outlook for copper, and a strong recommendation for investing in Indian equities.

Economic slowdown and dollar depreciation:

Addressing concerns about a financial crisis reminiscent of 2008, Walker acknowledged that while a slowdown is inevitable, it is unlikely to necessitate the kind of government and central bank interventions seen during the Great Recession. "It will be a pretty painful slowdown, but we can navigate it without extreme measures," he stated. Unlike 2008, he noted, current concerns stem more from economic fundamentals than from banking system vulnerabilities.

Walker forecasted a substantial depreciation of the U.S. dollar, predicting a decline of at least 10% as the American economy slows down. He pointed out that historically, economic downturns in the U.S. have led to a weaker dollar, which, in turn, could benefit emerging markets, particularly in Asia. This depreciation, he suggested, would provide relief to organizations with foreign debt obligations and create investment opportunities in developing economies.

India’s stock market: Strong investment bet:

Walker strongly advocated for increasing investment in Indian equities despite existing valuation concerns. He expressed confidence that India's economic expansion would justify current market prices through improved corporate performance. "India looks better to me now than at any time in the last 30 years in terms of policy stability and certainty," he noted, emphasizing the country's consistent economic policies and market liberalization initiatives.

Copper and gold outlook:

On commodities, Walker maintained a bullish stance on copper, seeing it as a long-term structural investment. He attributed this optimism to the rising demand driven by green energy initiatives, including renewable power, electric vehicles, and carbon reduction targets. According to him, the demand for copper is set to outstrip supply over the next decade, making it a valuable investment.

Walker also expressed a positive outlook on gold, albeit for different reasons. He highlighted growing fiscal deficits and sovereign debt concerns, which he believes will push investors toward gold as a safe-haven asset. "Bad behaviour has its consequences, and people start to lose faith, especially in the currencies that central banks and governments are printing," he remarked, reinforcing gold’s enduring appeal amid financial uncertainty.