The global economy is entering a period of weak growth and systemic disruption, according to a new report from the World Economic Forum.
The latest Chief Economists’ Outlook, published yesterday, found that 72 per cent of surveyed chief economists expect the global economy to weaken over the next year due to intensifying trade disruption, rising policy uncertainty, and accelerating technological change. The findings suggest the emergence of a new economic environment defined by persistent disruption and growing fragmentation.
The Outlook highlights sharp regional differences in economic performance. Emerging markets are expected to be the main engines of growth, with the Middle East and North Africa (Mena), South Asia, and East Asia and Pacific identified as key bright spots. One in three chief economists anticipates strong or very strong growth in these regions.
In contrast, the outlook for China is more mixed, with 56pc of chief economists forecasting moderate growth, while deflationary pressures are expected to persist. Growth is predicted to remain more stagnant in advanced economies. In Europe, 40pc of economists expect weak growth, coupled with fiscal loosening and low or moderate inflation. In the United States, most chief economists (52pc) anticipate weak or very weak growth and high inflation, as monetary policy is loosened.
The report warns that advanced and developing economies are on increasingly divergent growth pathways, with 56pc of chief economists expecting greater divergence over the next three years.
Chief economists overwhelmingly agree that today’s disruptions are structural rather than cyclical. Large majorities expect long-term disruption in natural resources and energy (78pc), technology and innovation (75pc), trade and global value chains (63pc), and global economic institutions (63pc).
“The contours of a new economic environment are already taking shape, defined by disruption across trade, technology, resources and institutions,” said World Economic Forum managing director Saadia Zahidi. “Leaders must adapt with urgency and collaboration to turn today’s turbulence into tomorrow’s resilience.”
Structural shifts are most visible in trade, fiscal policy, and debt. Some 70pc of chief economists rate the current level of trade disruption as “very high,” with over three-quarters expecting it to cascade into other economic sectors.
With global public debt mounting, the surveyed chief economists noted that debt vulnerabilities, once largely associated with emerging economies, are increasingly centered in advanced ones. Eighty per cent expect these risks to grow in the year ahead.
Additionally, fiscal vulnerabilities are more frequently identified as a top growth inhibitor in advanced economies (41pc) compared to developing economies (12pc).
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