Latest news with #ChiefEconomistsOutlook
Fibre2Fashion
2 days ago
- Business
- Fibre2Fashion
Economists see global growth coming under strain amid uncertainty: WEF
Uncertainty is the defining theme of the global economic environment, according to the World Economic Forum's (WEF) latest Chief Economists Outlook, which said 82 per cent consider it very high now, while 56 per cent anticipate easing over the next year. Ninety-seven per cent placed trade policy among the areas of highest uncertainty, followed by monetary policy (49 per cent) and fiscal policy (35 per cent). Uncertainty defines the global economic environment, the WEF's latest Chief Economists Outlook noted; 82 per cent see it as very high now. The growth outlook is divided, with weak prospects in North America, APAC resilience and cautious optimism in Europe. The most optimism about a strong economic expansion in South Asia, with India set to be the primary engine of growth this year and the next. Eighty-seven per cent anticipated that businesses will respond to uncertainty by delaying strategic decisions, increasing recession risks. The growth outlook is divided, with weak prospects in North America, resilience in the Asia-Pacific and cautious optimism in Europe. In Europe, while growth remains subdued, respondents pointed to emerging signs of improvement, driven by expansionary fiscal policy and continued monetary easing. The respondents were largely aligned in their assessment that higher tariffs and persistent trade tensions would fuel inflation and suppress trade volumes, and persistent uncertainty would inflict significant economic damage on the global economy, including through paralysed decision-making and heightened risks of policy mis-coordination, the report's executive summary said. Artificial intelligence (AI) is expected to drive growth, but 47 per cent anticipate related net job losses. The economists were the most optimistic about a strong economic expansion in South Asia, with India set to be the primary engine of growth this year and the next. They, however, warned of the overall global growth coming under strain from trade policy shocks and AI disruption. Respondents were clear that overall growth prospects were weakening, with the shift in trajectory being most pronounced in the United States, where the majority of respondents expected weak or very weak growth for the remainder of 2025, alongside rising inflation and a weakening dollar. China is also pursuing fiscal expansion in an effort to bolster growth, but the chief economists were divided on whether it would reach its target of 5-per cent gross domestic product (GDP) growth this year, given a range of both external and domestic economic challenges. A majority of surveyed economists saw the current US economic policy as having a lasting global impact, with 87 per cent expecting it to delay strategic business decisions and heighten recession risks. Although the rerouting of Chinese exports is casting a shadow over the South Asian region's economic prospects, a recently concluded trade deal between India and the United Kingdom was another source of optimism, the report said. Globally, public debt concerns were seen mounting as defence spending rises, with 86 per cent of chief economists expecting increased government borrowing. Seventy-nine per cent of respondents viewed the current geo-economic developments as signs of a significant structural shift for the global economy rather than a temporary disruption. Other key risks included rising concentration of market power (47 per cent) and disruption of existing business models (44 per cent). Fibre2Fashion News Desk (DS)
Scoop
4 days ago
- Business
- Scoop
Chief Economists Warn Global Growth Under Strain From Trade Policy Shocks And AI Disruption
A majority of surveyed economists see current US economic policy as having a lasting global impact, with 87% expecting it to delay strategic business decisions and heighten recession risks. The growth outlook is divided, with weak prospects in North America, resilience in Asia-Pacific and cautious optimism in Europe. Public debt concerns are mounting as defence spending rises, with 86% of chief economists expecting increased government borrowing. Artificial intelligence is expected to drive growth, but 47% anticipate net job losses. Geneva, Switzerland, 28 May 2025 – 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, according to a World Economic Forum report released today. The latest Chief Economists Outlook reveals that a strong majority (79%) of surveyed economists view the current geoeconomic developments as signs of a significant structural shift for the global economy rather than a temporary disruption. '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,' said Saadia Zahidi, Managing Director, World Economic Forum. 'These steps are essential for navigating today's economic headwinds and securing long-term resilience and growth.' Geopolitical and policy uncertainty clouds outlook Global uncertainty is seen as exceptionally high by 82% of the chief economists. While a narrow majority (56%) expect conditions to improve over the next year, concerns persist. Nearly all the chief economists (97%) place trade policy among the areas of highest uncertainty, followed by monetary policy (49%) and fiscal policy (35%). This uncertainty is expected to weigh on key economic indicators, including trade volumes (70%), GDP growth (68%) and foreign direct investment (62%). Most chief economists (87%) anticipate that businesses will respond to uncertainty by delaying strategic decisions, increasing recession risks. Debt sustainability is also a rising concern, cited by 74% of respondents for both advanced and developing economies. An overwhelming majority (86%) expect governments to meet rising defence spending needs through increased borrowing, potentially crowding out investment in public services and infrastructure. Growth expectations diverge sharply by region In early April, at the peak of uncertainty, most chief economists (77%) 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. AI as a growth catalyst but potential economic risk Artificial intelligence (AI) is poised to drive the next wave of economic transformation, unlocking significant growth potential but also introducing serious risks. Nearly half (46%) of chief economists expect AI to deliver a modest global real GDP boost of 0-5 percentage points over the next decade, with a further 35% projecting gains of 5-10 points. Key growth drivers include task automation (68%), accelerated innovation (62%) and worker augmentation (49%). Despite its potential, concerns persist: 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 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. This latest survey was conducted in early April 2025. The report supports the Forum's Future of Growth Initiative, aiming to foster dialogue and actionable pathways towards sustainable and inclusive economic growth.
India Today
5 days ago
- Business
- India Today
India, the 'North Star' in the dark sky of trade wars
Geopolitical tensions and economic nationalism are adversely affecting trade in many parts of the world. However, South Asia in the world - and India in particular - is being viewed as the North Star amid widespread global to the Chief Economists Outlook report from the World Economic Forum, the growth outlook for South Asia has been robust despite a challenging global environment, and economists are optimistic about South Asia's prospects, with one-third expecting strong or very strong growth for the remainder of the region's largest economy, is set to be the primary engine of growth, with a GDP expansion forecast by the International Monetary Fund at 6.2 per cent in 2025 and 6.3 per cent in 2026. The report added, however, that the region's immediate challenges intensified in early May with the outbreak of military exchanges between India and the rerouting of Chinese exports amid the tariff game is still a concern for the region, recent purchasing managers' index data surpassed expectations and showed unprecedented growth in new export orders. News reports suggest that Apple significantly increased iPhone shipments from India to the US in April, with exports rising 76 per cent year-over-year to about 30 lakh units. In contrast, shipments from China fell 76 per cent.A recently concluded trade deal between India and the UK is also eliciting optimism. The deal will "slash" Indian tariffs on key products such as whisky, cosmetics and medical devices, locking in reductions on 90 per cent of tariff lines for UK exports "to unleash opportunities for businesses across regions and nations of the UK". Most uncertain areasadvertisementThe uncertainty caused by wars in the territory and trade fronts is expected to disrupt trade for a long time. "79 per cent of chief economists surveyed see current developments as part of a long-term shift in the global economy, rather than a short-term disruption," the WEF report said. In the current period, 98 per cent of economists refer to it as high to very high uncertainty. The maximum disruption lies in the trade policy, followed by monetary and fiscal policy, and industrial and technology InMust Watch
Hindustan Times
5 days ago
- Business
- Hindustan Times
India to be primary engine of growth in 2025-26, says World Economic Forum
India is expected to be the primary engine of global economic growth in 2025 and 2026, according to a report of the World Economic Forum (WEF), Chief Economists Outlook. The report, based on a survey of leading economists, cites India's strong economic fundamentals and optimistic outlook despite global uncertainties. WEF said, "India, the region's largest economy, looked set to be the primary engine of growth". The International Monetary Fund has forecast India's GDP to grow at 6.2 per cent in 2025 and 6.3 per cent in 2026, making it the fastest-growing major economy in South Asia. This robust growth places India at the centre of the region's economic momentum. The report highlighted that although South Asia is facing some challenges, such as the impact of rerouted Chinese exports, there are positive signs. For instance, recent purchasing managers' index (PMI) data have shown better-than-expected performance, especially in new export orders, signalling strong demand for the region's goods and services. The WEF also mentioned that a recently concluded trade agreement between India and the United Kingdom is also seen as a boost to India's trade outlook. Such developments have further strengthened economists' confidence in the region. Among all global regions, South Asia has emerged as the most promising, with one-third (33 per cent) of economists expecting strong or very strong growth for the rest of 2025. However, the outlook is not without concerns. The recent outbreak of military tensions between India and Pakistan in early May has added uncertainty to the region. In terms of inflation, most chief economists expect moderate (61 per cent) to high (26 per cent) price rises across South Asia in the coming months. Globally, the economic environment remains fragile. The WEF report noted that the overall condition of the world economy has weakened since the start of the year. One of the major concerns is the shift in US economic and trade policy. Around 79 per cent of the surveyed economists believe that the dramatic policy changes in the US are part of a long-term structural shift, compared to 61 per cent who held that view in late 2024. In April, the US announced sharp increases in tariffs on several countries, sparking economic tensions. Although most of these tariff hikes have now been paused for 90 days, the uncertainty over what will follow remains. Despite the global challenges, the outlook for India and South Asia remains bright, driven by strong economic indicators, trade gains, and growing investor confidence.
India Gazette
6 days ago
- Business
- India Gazette
India set to be primary engine of growth in 2025 and 2026: World Economic Forum
New Delhi [India], May 29 (ANI): India is expected to be the primary engine of global economic growth in 2025 and 2026, according to a report of the World Economic Forum (WEF), Chief Economists Outlook. The report, based on a survey of leading economists, cites India's strong economic fundamentals and optimistic outlook despite global uncertainties. WEF said, 'India, the region's largest economy, looked set to be the primary engine of growth'. The International Monetary Fund has forecast India's GDP to grow at 6.2 per cent in 2025 and 6.3 per cent in 2026, making it the fastest-growing major economy in South Asia. This robust growth places India at the centre of the region's economic momentum. The report highlighted that although South Asia is facing some challenges, such as the impact of rerouted Chinese exports, there are positive signs. For instance, recent purchasing managers' index (PMI) data have shown better-than-expected performance, especially in new export orders, signalling strong demand for the region's goods and services. The WEF also mentioned that a recently concluded trade agreement between India and the United Kingdom is also seen as a boost to India's trade outlook. Such developments have further strengthened economists' confidence in the region. Among all global regions, South Asia has emerged as the most promising, with one-third (33 per cent) of economists expecting strong or very strong growth for the rest of 2025. However, the outlook is not without concerns. The recent outbreak of military tensions between India and Pakistan in early May has added uncertainty to the region. In terms of inflation, most chief economists expect moderate (61 per cent) to high (26 per cent) price rises across South Asia in the coming months. Globally, the economic environment remains fragile. The WEF report noted that the overall condition of the world economy has weakened since the start of the year. One of the major concerns is the shift in US economic and trade policy. Around 79 per cent of the surveyed economists believe that the dramatic policy changes in the US are part of a long-term structural shift, compared to 61 per cent who held that view in late 2024. In April, the US announced sharp increases in tariffs on several countries, sparking economic tensions. Although most of these tariff hikes have now been paused for 90 days, the uncertainty over what will follow remains. Despite the global challenges, the outlook for India and South Asia remains bright, driven by strong economic indicators, trade gains, and growing investor confidence. (ANI)
