…As 97% Place Trade Policy Among Highest Uncertainty Areas
A majority of surveyed economists believes that the global economic outlook has worsened since the start of the year, as rising economic nationalism and tariff volatility fuel uncertainty and risk stalling long-term decision-making across the global economic landscape.
The World Economic Forum (WEF) report released today showed that 79% of surveyed economists viewed the current geo-economic developments as signs of a significant structural shift for the global economy rather than a temporary disruption.
Commenting on the report’s findings, the WEF Managing Director, Saadia Zahidi, said: “Policymakers and business leaders must respond to heightened uncertainty and trade tensions with greater coordination, strategic agility and investment in the growth potential of transformative technologies like artificial intelligence.
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“These steps are essential for navigating today’s economic headwinds and securing long-term resilience and growth”, the economist added.
According to the report, global uncertainty is seen as exceptionally high by 82% of the chief economists while a narrow majority or 56% of them expect conditions to improve over the next year even as concerns persist.
The WEF publication also indicated that nearly all the chief economists, about 97%, placed trade policy among the areas of highest uncertainty, followed by monetary policy at 49% and fiscal policy at 35%.
The economists projected that this uncertainty was expected to weigh on key economic indicators, including trade volumes (70%), GDP growth (68%) and foreign direct investment (62%).
Similarly, most chief economists (87%) anticipated that businesses would respond to uncertainty by delaying strategic decisions, increasing recession risks even as debt sustainability is also a rising concern, cited by 74% of respondents for both advanced and developing economies.
Also, majority of the experts, representing 86% interviewed, expect governments to meet rising defence spending needs through increased borrowing, potentially crowding out investment in public services and infrastructure.
In early April, at the peak of uncertainty, 77% of the economists were anticipating weak or very weak growth through 2025 in the US, alongside high inflation (79%) and a weakening dollar (76%).
By contrast, they were cautiously optimistic about Europe’s prospects for the first time in years, mainly because of expectations of fiscal expansion, notably in Germany. The outlook for China remains muted, and the chief economists were divided over whether it will reach its target of 5% GDP growth this year. Optimism remains highest for South Asia, where 33% expect strong or very strong growth this year.
On AI as a growth catalyst but potential economic risk, the chief economists believe that Artificial intelligence (AI) is poised to drive the next wave of economic transformation, unlocking significant growth potential but also introducing serious risks.
Specifically, nearly 46% of chief economists expect AI to deliver a modest global real GDP boost of 0-5 percentage points over the next decade, while 35% of them were projecting gains of 5-10 points.
They listed key growth drivers as including task automation (68%), accelerated innovation (62%) and worker augmentation (49%). Despite its potential, concerns persist about the AI potential economic risk as 47% expect net job losses over the next decade, compared to just 19% who expect gains.
Above all, respondents highlighted the misuse of AI for disinformation and societal destabilization as the top risk to the economy (53%). Other key risks include rising concentration of market power (47%) and disruption of existing business models (44%).
To fully harness AI’s potential, the chief economists emphasized the need for bold action from both governments and businesses. For governments, top priorities include investing in AI infrastructure (89%), promoting adoption across key industries (86%), facilitating AI talent mobility (80%), and investing in upskilling and redeployment (75%). For businesses, the focus is on adapting core processes to integrate AI (95%), reskilling employees (91%) and training leadership to steer AI-driven transformation (83%).
The WEF Chief Economists Outlook report builds on extensive consultations and surveys with chief economists from the public and private sectors, organized by the World Economic Forum’s Centre for the New Economy and Society.
The latest survey was conducted in early April 2025 and supports the Forum’s Future of Growth Initiative, aiming to foster dialogue and actionable pathways towards sustainable and inclusive economic growth.
