January 21, 2025 Murky Economic Outlook

The Chief Economists Outlook from the World Economic Forum predicts strong growth in the U.S. but is less optimistic for other major countries.

By David Soyka, Senior Editor at Industry Today

All eyes are on the economy as the 2025 World Economic Forum begins this Monday, January 20. The latest Chief Economists Outlook from the World Economic Forum is not overly optimistic.  More than half of surveyed economists (56%) expect weakened economic conditions in 2025.

While the U.S. appears in a good position, with 44% of chief economists predicting strong growth in 2025, the outlook is less optimistic for other major economies. Europe continues to rank as the weakest region for the third consecutive year, with nearly three-quarters (74%) of surveyed economists expecting weak or very weak growth. Of particular interest is that China’s economic momentum is projected to slow with lower consumer demand and weaker productivity, further weakening the overall global economy.

Nearly all respondents (94%) expect further fragmentation of goods trade over the next three years, while 59% expect services trade to follow similarly. More than three-quarters foresee higher barriers to labor mobility, with almost two-thirds pointing to rising constraints on technology and data transfers. Domestic and international political developments, supply-chain realignments, and security concerns are top of mind to push up costs for businesses and consumers alike over the next three years. Business responses to the increasing fragmentation of the global economy are expected to include restructuring supply chains (91%), regionalizing operations (90%), and focusing on core markets (79%).

That said, nearly half (48%) of respondents expect trade volumes to increase in 2025. However, there is also a general consensus that trade tensions and protectionism are likely to cause disruptions and geopolitical conflict.

“The latest Chief Economists Outlook reveals a global economy under considerable strain,” said Aengus Collins, Head of Economic Growth and Transformation, World Economic Forum in a recent press release. “The growth outlook is at its weakest in decades and political developments both domestically and internationally highlight how contested economic policy has become. In this environment, fostering a spirit of collaboration will require more commitment and creativity than ever.”

Read the complete report  here. Follow the Annual Meeting 2025, which continues through to Friday, here and on social media using #WEF25.

Read more from the author on the theme of the World Economic Forum’s Annual Meeting 2025 “Collaboration for the Intelligent Age”

Building Cyber Resilience – Industry Today, January 16, 2025

The Good and Bad News About Job Disruption – Industry Today, January 14, 2025

Subscribe to Industry Today