World Economic Forum’s outlook for 2025

The global economic outlook for 2025 continues to paint a gloomy picture, with the majority of chief economists surveyed in a recent World Economic Forum report expecting a weakening global economy. Aengus Collins, Head of Economic Growth, Revival, and Transformation at the World Economic Forum, discussed the key pressure points and risks that are currently shaping the global ecosystem. According to Collins, the latest chief economist outlook highlights three primary pressure points that are contributing to the challenging economic landscape. Firstly, there is an overall weak perspective with 56% of chief economists anticipating a global economic slowdown in the year ahead. Secondly, amidst the uncertainty, all eyes are on the United States as changes in US policy could have significant global implications. And thirdly, there is a concern about intensifying fragmentation pressures in the global economy, driven by the changing relationship between politics and economics. One significant factor influencing the global economic landscape is the role of US President Donald Trump. The uncertain policy changes expected in the US, particularly in the areas of trade and protectionism, are causing anxiety among chief economists. The looming threat of trade wars, especially between the US and China, is a major concern, leading to increased volatility and uncertainty in the global markets. In terms of potential inflationary impacts, Collins highlighted that while changes to US trade policy are anticipated, they may not be as extreme as initially speculated. However, the growing fragmentation in the global economy, coupled with trade tensions, could lead to upward pressure on consumer and business prices. Collins emphasized the need for stronger collaboration among governments to address the growing risks and challenges facing the global economy. While fragmentation poses significant risks and costs, he also noted the resilience present within the global economy. Despite the obstacles, half of the chief economists still expect global trade volumes to increase, indicating a level of adaptability and flexibility among economic actors. In conclusion, while the economic outlook for 2025 appears bleak, there is room for cautious optimism and a call for enhanced collaboration to navigate the challenging economic environment. The World Economic Forum continues to advocate for a united approach to overcome global challenges, from climate change to technological innovation, amidst the evolving dynamics of the global economy.