Only 17 per cent foresee an improvement, pointing to heightened uncertainty in key regions and the need for measured policy responses worldwide.
Fifty-six per cent of chief economists surveyed expect weaker global economic conditions in 2025 compared to 17 per cent expecting improvement, the World Economic Forum said.
Forty-eight per cent of them still expect global trade volumes to rise, despite concerns over retaliatory protectionism.
Major changes are expected in trade, migration, deregulation, fiscal and industrial policies in the US.
The four-day WEF annual meeting begins today in Davos-Klosters, Switzerland.
While the United States appears poised for a short-term boost, with 44 per cent of chief economists predicting strong growth this year—up from 15 per cent when they were asked in August last year—the outlook for the year ahead remains less optimistic for other major economies.
Europe continues to rank as the weakest region for the third consecutive year, with nearly three-quarters expecting weak or very weak growth.
Meanwhile, China’s economic momentum is projected to slow amid subdued consumer demand and weaker productivity, further illustrating the uneven and uncertain nature of any global recovery, a WEF release said.
The new report underscores the significance of the recent US presidential election, with 61 per cent of chief economists characterising the impact for the global economy as a long-term shift rather than a short-term disruption.
Major changes are expected in trade, migration, deregulation, fiscal and industrial policies in the United States. The chief economists’ solid outlook for US growth in 2025 is in line with their expectation of near-term stimulus and of rising wages.
However, they remain mindful of risks, with almost all expecting a rise in public debt levels (97 per cent) in the country and higher inflation (94 per cent).
In addition to subdued global growth prospects, the report reveals intensifying pressures on the world’s economic interconnectedness. Ninety-four per cent of respondents predict further fragmentation of goods trade over the next three years.
More than three-quarters of those surveyed also foresee higher barriers to labour mobility, while almost two-thirds point to rising constraints on technology and data transfers.
The financial sector stands out as an exception, with less than half (48 per cent) expecting an increase in fragmentation, likely reflecting the pivotal role of cross-border financial flows in modern economies.
Nevertheless, domestic and international political developments, supply-chain realignments and security concerns loom large. These shifts are likely 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 per cent), regionalising operations (90 per cent) and focusing on core markets (79 per cent).
Nearly half (48 per cent) of chief economists anticipate an increase in global trade volumes in 2025, underscoring the resilience of global commerce. However, a large majority expect intensifying trade tensions, both between major powers and more widely.
Protectionism is identified as the primary factor that will drive lasting changes to global trade patterns, with other prominent contributors including conflict, sanctions and national security concerns.
Some 82 per cent of respondents predict greater regionalisation of trade over the next three years, alongside a continuing gradual shift from goods to services.
Fibre2Fashion News Desk (DS)
