The latest Chief Economists Outlook from the World Economic Forum (WEF) reveals that most chief economists globally anticipate weaker economic conditions in 2025. The report underscores major challenges ahead, with 56% of surveyed economists predicting a downturn. In contrast, only 17% expect any improvement, highlighting increased uncertainty in key regions and the importance of prudent policy measures.
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Regional Spotlight: India and South Asia Thrive Amid Global Challenges
South Asia shines as a beacon in the global economic scene, with 61% of chief economists anticipating robust or exceptionally strong growth in the region. India, notably, is projected to retain its status as the world's fastest-growing major economy, even amidst indications of a slight slowdown.
India's GDP growth for Q3 2024 was recorded at 5.4 percent, marking the slowest pace in almost two years.
As a result, the Reserve Bank of India revised its annual growth forecast downwards in December 2024.
China, on the other hand, is expected to experience a less favorable economic outlook, with growth anticipated to slow due to weak consumer demand and diminished productivity. Europe is also in a fragile state, as 74 percent of respondents foresee weak or very weak growth.
In contrast, the US economy is expected to demonstrate strong growth in 2025, highlighting its resilience and capacity to overcome persistent challenges.
Transformations in Global Trade Dynamics
The report emphasizes the changing dynamics of global trade:
Close to half (48%) of chief economists predict a rise in global trade volumes in 2025, indicating the ongoing strength of international commerce.
However, 82% of respondents foresee a stronger focus on regional trade over the next three years, a shift likely to be accompanied by a gradual transition from goods to services.
Drivers of Change in Trade Patterns
Protectionism continues to be a major force reshaping global trade. Other key influences include trade tensions between major powers, conflicts, sanctions, and concerns over national security.
These factors are likely to drive long-term changes in global trade patterns, emphasizing the difficulties of maintaining a unified international trade system.
In 2025, the global economy is set to face considerable challenges, with regional disparities in growth and shifting trade dynamics. While South Asia, driven by India, is expected to show strong performance, Europe and China face hurdles, revealing the uneven nature of the global recovery. As the world navigates this complex landscape, balanced and cooperative policy responses will be essential to ensure sustainable growth and stability.
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