In the MENA region, 64 percent of chief economists surveyed by the World Economic Forum (WEF) expect moderate growth
The latest Chief Economists Outlook from the World Economic Forum (WEF) shows that the global economy is headed for a challenging year. For 2025, the majority of the leading economists (56 percent) anticipate weaker economic conditions — with only 17 percent predicting improvement. Aengus Collins, head of economic growth and transformation at WEF, says that their latest report “reveals a global economy under considerable strain.”
“The growth outlook is at its weakest in decades and political developments both domestically and internationally highlight how contested economic policy has become. In this environment, fostering a spirit of collaboration will require more commitment and creativity than ever,” he states.
Read: Global economy to weaken in 2025 on political uncertainty, rising debt: Report
Growth expectations
For 2025, global growth prospects are generally subdued. However, the WEF report shows notable differences across regions. For example, 44 percent of chief economists expect the U.S. to achieve strong growth. This is a substantial increase from the 15 percent who expressed similar optimism in the WEF’s August 2024 survey.
Beyond this short-term boost, however, experts emphasize longer-term caution. The recent US presidential election is seen as a major factor, with 61 percent of chief economists viewing its impact on the global economy as a lasting shift rather than a temporary disruption. They anticipate substantial changes in trade, migration, deregulation, and fiscal and industrial policies.
In the Middle East and North Africa (MENA), 64 percent of respondents expect moderate growth, and another 11 percent foresee very strong growth. Meanwhile, 25 percent project weak growth in the region this year.
Latin America and the Caribbean also present a mixed outlook, with two-thirds of respondents anticipating moderate growth. In the report, South Asia emerged as a global growth leader, with 61 percent of economists expecting strong or very strong growth in 2025. India continues to drive this performance as the world’s fastest-growing major economy. However, the country’s growth rate, while impressive, has slowed recently, with GDP growth dipping to 5.4 percent in the third quarter of 2024.
Meanwhile, Europe remains the weakest global region for the third consecutive year, as 74 percent of economists expect either weak or very weak growth. Sluggish productivity, geopolitical uncertainty, and lackluster consumer confidence are among the biggest factors. China’s economy also shows signs of slowing — 47 percent of the respondents anticipate weak growth, as compared to 12 percent who predict strong growth. Subdued consumer demand and declining productivity are key factors behind this downturn.
Easing inflation
Globally, chief economists note that global inflation will further ease this year. The International Monetary Fund (IMF) previously projected an annual average inflation rate of 4.3 percent, a figure lower than 2023’s 6.7 percent. Advanced economies are driving this deceleration, as these countries have been returning to their inflation targets more quickly than emerging market and developing economies. The report shows similar trends are observed in most regions.
The majority expect moderate inflation and only a small fraction anticipate either very low or very high inflation. For instance, 68 percent of respondents in the MENA region foresee moderate inflation, with only 12 percent expecting high inflation.
Meanwhile, in South Asia, 70 percent expect moderate inflation, and 7 percent predict high inflation. Moreover, the report notes a disparity between goods and services inflation. The cost of services (e.g., healthcare, education, housing) remains persistently high, with core services inflation still about 50 percent higher than pre-pandemic levels in many economies. Several factors are behind this.
Apart from services being labor-intensive, rising wages in many countries have also kept costs elevated. Additionally, demand for services, especially in sectors like travel, dining, and healthcare, has remained robust as economies recover.
The trade landscape
The report also underscores growing strains on global integration. But what’s behind this increasing fragmentation? According to chief economists, the biggest drivers of fragmentation are geopolitical rivalries and domestic policy choices, with 67 percent and 36 percent of respondents, respectively, rating these as very important factors.
A fragmented world affects several aspects of the economy, including trade. “Among all the indications of the economic fragmentation discussed in the previous section, the erosion of support for the global trading system is the most prominent. Although global trade is on track to hit a record $33 trillion in 2024, the system is facing significant threats,” the report noted.
There’s a consensus agreement among all respondents that perfectionism is the biggest driver of changing global trade patterns. This is compounded by many other factors, including supply chain restructuring (93 percent), conflict and sanctions (83 percent), and national security concerns (77 percent). The report underscores how these factors are connected.
“Clearly, there are close interconnections between many of these. For example, national security concerns are an increasingly prominent justification for protectionist trade restrictions, such as US tariffs on Chinese electric vehicles. Conflict can lead to significant supply-chain changes, as was the case following Russia’s invasion of Ukraine in 2022. Another key trend in trade is the ongoing shift from goods trade to services trade, which 82 percent of respondents predict to continue in the next three years.
While merchandise exports are still about three times larger in value than services exports, services trade is growing faster. Between 2009 and 2023, merchandise exports rose by 89 percent to $23.8 trillion, while services exports grew by 116 percent to $7.9 trillion. Digitalization has driven this growth, with digitally delivered services — such as software and online media — expanding nearly fourfold over the past decade.
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