Why Europe's CFOs are feeling surprisingly upbeat for 2025

European CFOs are cautiously optimistic about the year ahead, with two-thirds predicting a stable or positive business outlook for 2025, according to a recent Horváth study. The survey, which gathered insights from over 150 CFOs across a dozen European countries, paints a picture of resilience amid geopolitical and economic uncertainty.

The study found that 33% of CFOs expect their businesses to perform positively in 2025, while another 32% foresee stable growth or, at the very least, no deterioration in financial performance. Despite concerns often voiced about the implications of Donald Trump’s second term as US President, only 18% of respondents believe his administration’s policies will negatively impact their businesses.

“Political events and developments are always monitored by companies and are factored into business assessments and decision-making. However, they are not always decisive for business prospects,” noted Achim Wenning, partner at Horváth.

Performance Management as a Growth Enabler

CFOs from companies expressing optimism attributed their confidence to strong performance management practices. Effective performance management—characterized by mature data capabilities and the ability to translate insights into actionable strategies—was cited as a critical factor for sustaining growth.

The majority of respondents rated their performance management processes as satisfactory across six out of eight dimensions. However, Horváth’s analysts emphasized the need for further progress in this area to maintain competitiveness. Digital transformation emerged as a key area of focus.

“Most Finance functions achieve an adequate level of performance management through a high level of manual effort. With a further step towards digitization and automation, information quality, predictive capabilities, and a reduction in resources can be achieved,” Wenning explained.

Generative AI: A Game Changer for Finance

Generative AI is seen as a significant driver of efficiency and innovation within finance departments. CFOs identified its potential to enhance reporting and forecasting, streamline operational planning, and improve monthly budgeting processes. These use cases align with McKinsey & Company’s valuation of generative AI as a $4.4 trillion productivity opportunity globally.

While previously viewed as most impactful in customer service and sales, the Horváth study highlights how generative AI is increasingly transforming finance functions, offering a pathway to improved decision-making and resource optimization.

As CFOs look to 2025, the combination of robust performance management and emerging technologies like generative AI appears set to underpin their cautiously optimistic outlook.

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