Fashion
Eurozone GDP growth to stay subdued at 1.1% in 2025: S&P
After 2025, the growth is expected to accelerate above the potential, reaching 1.4 per cent in 2027. Lower policy rates, strong private balance sheets that translate into a resilient labour market, and expansive fiscal policies will provide medium-term tailwinds.
“Our forecasts have only changed slightly since our last update in June 2025. The US and EU administrations’ trade deal has not altered the macroeconomic picture much. Our higher GDP growth forecasts for 2025 reflect a larger GDP carryover at the end of 2024 due to data revisions in some countries,” S&P Global Ratings said in its latest report titled, ‘Economic Outlook Eurozone Q4 2025: Recovery Continues Despite Consumer Hesitancy.’
Eurozone GDP growth is forecast at 1.1 per cent in 2025, with recovery accelerating to 1.4 per cent by 2027, supported by lower rates, strong labour markets, and fiscal policy, according to S&P Global.
Inflation is projected at 2.1 per cent in 2025 before easing.
Risks include higher US tariffs, geopolitical tensions, and weak confidence, though impacts vary across countries.
The eurozone economy remained resilient in the second quarter (Q2) of 2025. However, this is largely because exports to the US—which were front run ahead of tariffs in the first quarter—were slow to reverse in the second quarter. The report believes this reversal will extend into the third quarter.
The euro has appreciated more quickly than expected, largely owing to market concerns about the independence of US monetary policy. While this has given European consumers an extra boost via lower energy prices, it has not prompted a downward revision of inflation forecasts.
Strong labour-market conditions are expected to keep real wage growth above productivity for some time, sustaining inflationary pressure over the medium term.
S&P Global Ratings projects inflation to ease to 1.8 per cent in 2026 and 1.9 per cent in 2027, aligning closely with the European Central Bank’s (ECB) 2 per cent target. Barring external shocks, the ECB deposit facility rate is considered to have bottomed out at 2 per cent in the current rate-cutting cycle. Quantitative tightening is also nearing completion, which may ease long-term yields on euro-denominated government bonds.
Key risks to the baseline growth outlook include heightened tariffs, geopolitical tensions, and weak consumer confidence in certain European economies. Additional spillover effects may emerge from slower growth among Europe’s major trading partners, particularly the US, added the report.
Inflation risks remain two-sided: it could rise further in the event of escalating trade tensions, fiscal stimulus overlapping with labour-market bottlenecks, or geopolitical shocks disrupting commodity markets. Conversely, it could fall if trade diversions favour Europe or the euro appreciates more sharply than expected.
Following the recent EU–US trade announcement, baseline assumptions now include a maximum US tariff of 15 per cent on most manufactured goods. This compares with June 2025 assumptions of 10 per cent on all goods.
Despite these changes, the macroeconomic implications remain largely unchanged. At the aggregate EU level, the direct trade impact is estimated at around -0.4 per cent of GDP, only slightly lower than the -0.5 per cent implied by the April 2 announcement. Nevertheless, tariffs are now about eight times higher than they were before April, when the US levied an average tariff of less than 2 per cent on European imports.
Importantly, the tariff burden will vary across countries. Ireland and Belgium face fewer negative impacts. In contrast, Switzerland—though not an EU member—has seen its outlook deteriorate sharply after the US imposed 39 per cent tariffs, significantly affecting its growth prospects.
Fibre2Fashion News Desk (SG)
Translated by
Nazia BIBI KEENOO
Published
September 25, 2025
The British menswear brand once again turns to Spanish talent for its new campaign. Following a first collaboration in March of this year, Hackett London reunites with two leading figures in motorsport — Carlos Sainz Sr and Jr — to unveil its Autumn/Winter 2025 campaign. With this second chapter, the brand underscores its commitment to uniting heritage and modernity through timeless British style.
Entitled “Tradition and Modernity: A Winter Together,” the campaign features the legendary Madrid-born rally driver alongside his son, who currently competes for the Williams Racing Formula 1 team. Set against autumnal backdrops in the Oxfordshire countryside, the shoot captures moments of camaraderie — from driving classic cars to competing over a game of table football — amid misty landscapes, gardens, and stately homes where history and nature coexist.
The capsule for the coming season revisits staples of classic British style, including tweed, tartan and structured silhouettes, combined with modern, functional materials. The color palette blends warm tones such as ivory, stone grey and gold, offset by deep blues and festive nods to the “Twelve Days of Christmas.” The collection also features a range of motifs such as Donegal, paisley and birdseye, alongside traditional techniques like cable knitting.
The line includes a selection of transitional pieces — from brushed cotton jumpers to soft tailoring — enriched with contemporary details such as detachable linings, stretch fabrics and distinctive internal finishes. Outerwear completes the offering, with waxed jackets, peacoats, overshirts and gilets.
Founded in Chelsea in 1983 by Jeremy Hackett, initially as a second-hand shop, Hackett London has grown to over 1,000 points of sale worldwide. The brand now belongs to the Spanish group AWWG, which also owns Pepe Jeans and Façonnable. AWWG represents the agencies of Tommy Hilfiger, Calvin Klein, DKNY, Donna Karan, and Karl Lagerfeld in Spain and Portugal. Operating in 86 countries through a network of more than 3,500 stores, AWWG reported turnover of €633 million and EBITDA of €65.1 million in its 2023/24 financial year.
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By
Bloomberg
Published
September 25, 2025
LVMH is ramping up its expansion in South Korea, with the luxury conglomerate seeking to diversify its global footprint amid geopolitical and economic uncertainties that are clouding the consumer spending outlook in the United States and China.
The group’s two largest fashion labels — Louis Vuitton and Christian Dior — are both planning to expand their flagship maison-style stores in Seoul’s Cheongdam district within the next few years, according to people familiar with the matter who asked not to be identified discussing private deliberations. Dior’s revamp may take place as early as 2027 and is expected to feature a permanent restaurant, according to the report.
LVMH Moët Hennessy Louis Vuitton SE’s watch and jewelry house Bulgari is reportedly eyeing its first flagship location in South Korea, as the group strengthens its regional presence. Meanwhile, Tiffany & Co. is expected to open a flagship store in Seoul’s Cheongdam district in 2027, according to the same sources.
A representative for LVMH did not respond to a request for comment.
South Koreans’ enduring love for luxury, combined with a resilient economy and rising consumer confidence, has made the country a bright spot for top industry names amid an increasingly uncertain global retail landscape. Louis Vuitton, Hermès and Chanel posted almost 10% growth in their combined sales in the country last year, reaching $3.3 billion, according to government data.
Beyond domestic shoppers, a surge in visitors — mainly from China and Japan — along with the weaker won, has further boosted sales. Tourist spending rose by about a third to a record 9.26 trillion won ($6.6 billion) last year, according to the Korea Herald.
At the same time, China’s premium goods market shrank the most in a decade last year, while U.S. import tariffs have prompted fashion houses to hike prices, potentially driving wealthy shoppers to buy luxury items abroad. Even Japan, where a weak yen had fueled a boom in luxury spending, is now showing signs of a slowdown.
LVMH, founded by billionaire Bernard Arnault, has already been expanding its presence in South Korea. Celine opened its first boutique there in December last year, and Fendi launched its first flagship in 2023.
Other luxury groups are also betting on the South Korean market. Cie Financière Richemont SA — which saw its sales rise 20% in the country for the financial year ended in March — opened a new flagship for Swiss watchmaker Vacheron Constantin in Seoul in June. The store features Korean artworks, a digital archive, a private lounge, and a dedicated space for exhibitions and events. Hermès also relocated and expanded its flagship in the capital, reopening the location in August.
China’s economy is expected to slow sharply, with real GDP growth projected at about 4 per cent year-on-year (YoY) in the second half of 2025 and through 2026, down from 5.3 per cent in the first half of this year, according to S&P Global Ratings. The deceleration is driven by weakening exports, sluggish organic domestic demand, and only modest macroeconomic stimulus.
China’s overall exports held up through August despite a steep 33 per cent YoY fall in shipments to the US, due to robust growth to ASEAN markets. However, exports are expected to slow in the coming months due to higher US tariffs, slowing global demand, and rising Mexican import duties on economies without free trade agreements, which also cover China.
S&P Global Ratings sees China’s growth slowing to 4 per cent in the second half of 2025-2026 on weak exports, housing slump, and muted demand.
Asia-Pacific faces US tariff headwinds, with India hit hardest, but resilient consumption, AI-led investment, and policy easing will cushion the impact.
Inflation easing allows further regional rate cuts.
Uncertainty is amplified by the 90-day review mechanism under which China’s trade status with the US can be reset based on bilateral politics, leaving exporters vulnerable, S&P Global said in a release.
Domestic demand, which began the year strongly, is losing momentum as consumption and investment soften, dragged down by a persistent housing slump, weaker confidence, and fading impact of earlier trade-in schemes. Fiscal support has so far been limited given robust headline GDP in H1 2025, where net trade contributed 1.7 percentage points, but this boost will fade.
Some fiscal measures could emerge later this year, though their impact on 2025 growth would be modest and felt more in 2026. Persistent downward pressure on prices highlights structural overcapacity and muted demand, with profit margins across industries squeezed and nominal GDP growth slipping to 3.9 per cent in Q2, the weakest since the 2020 pandemic shock.
Beijing’s efforts to curb ‘involution’—cut-throat competition pushing down prices—have only partly slowed producer price declines, and the fundamental demand-supply imbalance remains unresolved.
Across Asia-Pacific, growth has held up in H1 2025 thanks to resilient domestic demand and strong exports, particularly of tech products and components from Southeast Asia and Taiwan, fuelled by global AI-related investment in data centres and equipment.
Domestic consumption has been robust in most emerging markets, supported by healthy labour markets, low inflation, and policy easing, while investment has been buoyant in India, Malaysia, and Taiwan. India’s growth is projected to hold at 6.5 per cent in FY25, supported by a benign monsoon, GST and income tax cuts, and accelerating government capex, though private investment remains subdued.
In Southeast Asia, GDP growth is expected to ease to an average of 4.5 per cent in 2025, with similar below-trend levels likely in 2026 as the impact of US tariffs deepens.
US tariffs remain a key external headwind, weighing on trade, investment, and growth both within the US and globally. The latest tariff schedule has left China slightly better off relative to earlier expectations but still facing much higher effective US tariffs compared to the pre-2018 period. Southeast Asian emerging markets are experiencing somewhat higher effective tariffs, while India is facing much sharper increases than anticipated, potentially undermining its manufacturing export ambitions.
Developed Asia’s exposure remains broadly in line with projections. The risk of further tariff adjustments is significant, particularly with Washington’s plans to curb transshipment and re-routing of shipments to avoid duties.
Monetary conditions are becoming more supportive across the region. Inflation has been easing since early 2024, helped by softer commodity and energy prices, allowing regional central banks to cut policy rates by an average of 55 basis points so far in 2025.
Currency appreciation against the US dollar has been strong for most Asia-Pacific economies since late 2024, particularly for the Malaysian ringgit and Thai baht, though some currencies softened slightly in Q3. With US policy rates expected to fall further, S&P anticipates additional rate cuts in Asia, particularly where inflation is below target.
In India, inflation has dropped faster than expected, to 3.2 per cent for FY25, creating space for a 25 bps rate cut by the Reserve Bank of India. Japan is expected to continue gradually raising rates as inflation converges toward the BOJ’s 2 per cent target, supported by narrowing wage-price gaps.
As a region heavily exposed to external trade, Asia-Pacific will feel the negative impact of rising trade barriers. Still, relatively solid domestic demand should cushion the blow.
Fibre2Fashion News Desk (HU)
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