The global economy is heading into a period of heightened uncertainty, with more than half (56%) of leading chief economists predicting weaker economic conditions in 2025, according to the latest Chief Economists Outlook published by the World Economic Forum (WEF). In contrast, only 17% foresee improvement, highlighting persistent challenges across major economies.

U.S.: Short-Term Growth, Long-Term Concerns

While the United States is expected to witness near-term economic momentum, concerns over rising debt and inflation temper the optimism. The report indicates that 44% of chief economists anticipate strong U.S. growth in 2025, a notable increase from 15% in August 2024. However, the long-term outlook is clouded by fiscal policy shifts and growing public debt, with 97% of respondents expecting debt levels to rise and 94% predicting inflationary pressures.

Political developments, particularly following the recent U.S. presidential election, are poised to reshape economic strategies. A majority (61%) of economists believe the election’s impact will be long-lasting, driving changes in trade, migration, deregulation, and industrial policies. 

Europe’s Economic Struggles Persist

For the third consecutive year, Europe remains the weakest region in terms of growth prospects. Nearly three-quarters (74%) of chief economists expect weak or very weak growth in 2025, underscoring ongoing economic stagnation. The continent continues to grapple with geopolitical instability, sluggish consumer demand, and structural economic challenges, further widening the growth gap with other regions.

China’s Slowdown Signals Global Repercussions

China’s economic outlook remains fragile, as slowing productivity and subdued consumer demand dampen recovery efforts. While China has historically been a key driver of global economic growth, the report suggests that these headwinds could lead to broader repercussions for global trade and investment flows.

Global Trade: Resilience Amid Protectionist Pressures

Despite rising concerns over trade protectionism, nearly half (48%) of chief economists still expect global trade volumes to increase in 2025. However, intensifying geopolitical tensions and economic nationalism continue to pose significant risks. A majority (82%) of respondents foresee greater regionalization of trade over the next three years, as businesses restructure supply chains (91%), focus on core markets (79%), and pivot toward service-based trade.

The fragmentation of global trade is already evident, with 94% of economists predicting increased segmentation in goods trade, and 59% expecting similar trends in services trade. Trade restrictions and regulatory barriers are expected to elevate costs for businesses and consumers alike.

The Future of Growth: Navigating Uncertain Waters

In lieu of this, the WEF report points out that what is urgently needed are better policy coordination and global collaboration to navigate through the challenges ahead.

“The growth outlook is at its weakest in decades, and economic policy is more contested than ever,” said Aengus Collins, Head of Economic Growth and Transformation at the World Economic Forum. “In this environment, fostering collaboration will require more commitment and creativity than ever.”

As global leaders convene at the World Economic Forum’s Annual Meeting 2025 in Davos under the theme Collaboration for the Intelligent Age, discussions will centre around charting new economic pathways that balance growth, innovation, sustainability, and resilience.

With economic uncertainties looming large, the global community faces a critical juncture in shaping a sustainable and inclusive future. In that scenario, the upcoming forum at Davos would be something to watch out for.