Chief Economists foresee an increase in regionalization of trade and a continued shift from goods to services. Advanced economies are likely to benefit more from services trade compared to developing economies. However, the growing importance of services is recognized as a key driver of economic development.
The outlook remains cautious though, with 56% of Chief Economists predicting a weakening global economy in 2025, while only 17% expect improvement. Global growth expectations are muted, with significant regional variations.
Under the Trump administration, the US economy is projected to experience robust growth in 2025, and South Asia, particularly India, is also expected to maintain strong growth. In contrast, Europe faces a bleak outlook, with 74% of respondents forecasting weak or very weak growth. China’s growth is also expected to slow gradually in the coming years.
Global inflation is easing, with the International Monetary Fund (IMF) projecting an annual average of 4.3% in 2025, down from 5.8% in 2024. However, services inflation remains higher than goods inflation, especially in advanced and emerging-market economies. Moderate inflation is anticipated in most regions, but the short-term growth outlook for the US is accompanied by a significant rise in inflation expectations.
US policy is expected to have a substantial impact on the global economy in the coming years, with 61% of chief economists viewing this impact as a long-term shift rather than a short-term disruption.
Under the Trump administration, significant changes are expected in trade, migration, deregulation, fiscal policy, industrial policy, and foreign policy. Large majorities anticipate increases in inflation and public debt levels, as well as stock-market gains.
The global economic landscape is becoming increasingly fragmented, particularly in goods trade, where 94% of chief economists expect further fragmentation over the next threetr years. Significant majorities also foresee increased barriers to labor mobility and transfers of technology and data. Geopolitical rivalries and domestic policy choices are seen as key drivers of these fragmentation trends, underscoring the growing importance of interactions between political and economic factors.
The Chief Economists highlight the main impact of rising fragmentation as likely cost increases for consumers and businesses. Collaboration on global challenges, such as climate change, is also expected to become more difficult. In response to these shifts, multinational companies are expected to adapt by altering supply chains and restructuring their organizations.
