Latest news with #SaadiaZahidi
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.
NDTV
6 days ago
- Business
- NDTV
India Looks Set To Be Primary Engine Of Growth In 2025, 2026: World Economic Forum Report
New Delhi: Chief economists from across the world are the most optimistic about a strong economic expansion in South Asia, with India looking set to be the primary engine of growth in 2025 and 2026, a new survey showed on Wednesday. The chief economists, however, warned of the overall global growth coming under strain from trade policy shocks and AI disruption, the World Economic Forum (WEF) said in its latest 'Chief Economists Outlook' report. 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. The global growth outlook was divided, with weak prospects in North America, resilience in Asia-Pacific and cautious optimism in Europe. "The outlook for China remains muted, and the chief economists were divided over whether it will reach its target of 5 per cent GDP growth this year. "Optimism remains highest for South Asia, where 33 per cent expect strong or very strong growth this year," the WEF said. The survey of chief economists from across the world in private and public sectors found that the growth outlook for South Asia has been robust despite a challenging global environment. Among all regions, chief economists surveyed were most optimistic about South Asia's prospects, with one-third expecting strong or very strong growth for the remainder of 2025. However, the region's immediate challenges intensified in early May with the outbreak of military exchanges between India and Pakistan. Across the region, chief economists expected moderate to high inflation. The report noted that India, South Asia's largest economy, looked set to be the primary engine of growth, with GDP expansion forecast by the IMF at 6.2 per cent for 2025 and 6.3 per cent in 2026. Although the rerouting of Chinese exports is casting a shadow over the region's economic prospects, a recently concluded trade deal between India and the UK was another source of optimism, it said. Globally, public debt concerns were seen mounting as defence spending rises, with 86 per cent of chief economists expecting increased government borrowing. Artificial intelligence was expected to drive growth, but 47 per cent anticipated net job losses. 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, the report said. According to the WEF, a strong majority (79 per cent) 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," WEF Managing Director Saadia Zahidi said. "These steps are essential for navigating today's economic headwinds and securing long-term resilience and growth," she added. Global uncertainty was seen as exceptionally high by 82 per cent of the chief economists. While a narrow majority (56 per cent) expected conditions to improve over the next year, concerns persist. Nearly all the chief economists (97 per cent) placed trade policy among the areas of highest uncertainty, followed by monetary policy (49 per cent) and fiscal policy (35 per cent). Most chief economists (87 per cent) anticipated that businesses will respond to uncertainty by delaying strategic decisions, increasing recession risks. An overwhelming majority (86 per cent) expected governments to meet rising defence spending needs through increased borrowing, potentially crowding out investment in public services and infrastructure. According to the survey, AI was poised to drive the next wave of economic transformation, unlocking significant growth potential but also introducing serious risks. Nearly half (46 per cent) of chief economists expected AI to deliver a modest global real GDP boost of 0-5 percentage points over the next decade, with a further 35 per cent projecting gains of 5-10 points. Despite its potential, concerns persisted as 47 per cent expect net job losses over the next decade, compared to just 19 per cent who expect gains. Above all, respondents highlighted the misuse of AI for disinformation and societal destabilisation as the top risk to the economy (53 per cent). Other key risks included rising concentration of market power (47 per cent) and disruption of existing business models (44 per cent).
Economy ME
6 days ago
- Business
- Economy ME
Global uncertainty exceptionally high as chief economists concerned about trade shocks, AI disruption: WEF
The global economic outlook has deteriorated since the beginning of the year, as rising economic nationalism and tariff volatility contribute to uncertainty and threaten to stall long-term decision-making, according to a recent report from the World Economic Forum (WEF) . The latest Chief Economists Outlook reveals that a substantial majority (79 percent) of surveyed economists interpret the current geoeconomic developments as indications of a significant structural shift in the global economy rather than as 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,' stated Saadia Zahidi, managing director of the World Economic Forum. 'These steps are essential for navigating today's economic headwinds and securing long-term resilience and growth.' High levels of global uncertainty Global uncertainty is considered exceptionally high by 82 percent of chief economists. While a slim majority (56 percent) anticipate conditions to improve over the next year, concerns remain prevalent. Nearly all chief economists (97 percent) identify trade policy as one of the areas of highest uncertainty, followed by monetary policy (49 percent) and fiscal policy (35 percent). This uncertainty is expected to adversely affect key economic indicators, including trade volumes (70 percent), GDP growth (68 percent), and foreign direct investment (62 percent). Most chief economists (87 percent) predict that businesses will react to uncertainty by postponing strategic decisions, which increases recession risks. Debt sustainability is also a growing concern, cited by 74 percent of respondents for both advanced and developing economies. An overwhelming majority (86 percent) expect governments to address rising defense spending needs through increased borrowing, potentially crowding out investments in public services and infrastructure. In early April, during the height of uncertainty, most chief economists (77 percent) anticipated weak or very weak growth through 2025 in the U.S., along with high inflation (79 percent) and a weakening dollar (76 percent). In contrast, they expressed cautious optimism regarding Europe's prospects for the first time in years, primarily due to expectations of fiscal expansion, particularly in Germany. The outlook for China remains subdued, with chief economists divided on whether it will achieve its target of 5 percent GDP growth this year. Optimism is strongest for South Asia, where 33 percent expect robust or very robust growth this year. Read more: Global economy to strengthen this year, but growth uneven: World Economic Forum report AI's economic impact Artificial intelligence is set to drive the next wave of economic transformation, unlocking considerable growth potential but also introducing significant risks. Nearly half (46 percent) of chief economists anticipate AI will provide a modest global real GDP boost of 0-5 percentage points over the next decade, while an additional 35 percent project gains of 5-10 percentage points. Key growth drivers include task automation (68 percent), accelerated innovation (62 percent), and worker augmentation (49 percent). Despite the potential, concerns remain: 47 percent expect net job losses over the next decade, compared to just 19 percent who foresee gains. Above all, respondents emphasized the misuse of AI for disinformation and societal destabilization as the primary risk to the economy (53 percent). Other significant risks include the rising concentration of market power (47 percent) and the disruption of existing business models (44 percent). To fully capitalize on AI's potential, chief economists underscored the necessity for bold action from both governments and businesses. For governments, top priorities include investing in AI infrastructure (89 percent), promoting adoption across key industries (86 percent), facilitating AI talent mobility (80 percent), and investing in upskilling and redeployment (75 percent). For businesses, the focus is on adapting core processes to integrate AI (95 percent), reskilling employees (91 percent), and training leadership to guide AI-driven transformation (83 percent).
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Business Standard
6 days ago
- Business
- Business Standard
Economists see global growth coming under strain; India story intact: WEF
Chief economists from across the world are the most optimistic about a strong economic expansion in South Asia, with India looking set to be the primary engine of growth in 2025 and 2026, a new survey showed on Wednesday. The chief economists, however, warned of the overall global growth coming under strain from trade policy shocks and AI disruption, the World Economic Forum (WEF) said in its latest 'Chief Economists Outlook' report. 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. The global growth outlook was divided, with weak prospects in North America, resilience in Asia-Pacific and cautious optimism in Europe. "The outlook for China remains muted, and the chief economists were divided over whether it will reach its target of 5 per cent GDP growth this year. "Optimism remains highest for South Asia, where 33 per cent expect strong or very strong growth this year," the WEF said. The survey of chief economists from across the world in private and public sectors found that the growth outlook for South Asia has been robust despite a challenging global environment. Among all regions, chief economists surveyed were most optimistic about South Asia's prospects, with one-third expecting strong or very strong growth for the remainder of 2025. However, the region's immediate challenges intensified in early May with the outbreak of military exchanges between India and Pakistan. Across the region, chief economists expected moderate to high inflation. The report noted that India, South Asia's largest economy, looked set to be the primary engine of growth, with GDP expansion forecast by the IMF at 6.2 per cent for 2025 and 6.3 per cent in 2026. Although the rerouting of Chinese exports is casting a shadow over the region's economic prospects, a recently concluded trade deal between India and the UK was another source of optimism, it said. Globally, public debt concerns were seen mounting as defence spending rises, with 86 per cent of chief economists expecting increased government borrowing. Artificial intelligence was expected to drive growth, but 47 per cent anticipated net job losses. 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, the report said. According to the WEF, a strong majority (79 per cent) 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," WEF Managing Director Saadia Zahidi said. "These steps are essential for navigating today's economic headwinds and securing long-term resilience and growth," she added. Global uncertainty was seen as exceptionally high by 82 per cent of the chief economists. While a narrow majority (56 per cent) expected conditions to improve over the next year, concerns persist. Nearly all the chief economists (97 per cent) placed trade policy among the areas of highest uncertainty, followed by monetary policy (49 per cent) and fiscal policy (35 per cent). Most chief economists (87 per cent) anticipated that businesses will respond to uncertainty by delaying strategic decisions, increasing recession risks. An overwhelming majority (86 per cent) expected governments to meet rising defence spending needs through increased borrowing, potentially crowding out investment in public services and infrastructure. According to the survey, AI was poised to drive the next wave of economic transformation, unlocking significant growth potential but also introducing serious risks. Nearly half (46 per cent) of chief economists expected AI to deliver a modest global real GDP boost of 0-5 percentage points over the next decade, with a further 35 per cent projecting gains of 5-10 points. Despite its potential, concerns persisted as 47 per cent expect net job losses over the next decade, compared to just 19 per cent who expect gains. Above all, respondents highlighted the misuse of AI for disinformation and societal destabilisation as the top risk to the economy (53 per cent). Other key risks included rising concentration of market power (47 per cent) and disruption of existing business models (44 per cent).
