LONDON
The global economic outlook is pressured by uncertainties, fragmentation, and debt, according to the World Economic Forum’s Chief Economists Outlook survey report released on Thursday.
The report is based on a survey of the world’s leading private sector chief economists.
Some 56% of the respondents expect weaker economic growth this year, while only 17% estimate improvement, 44% of economists expect strong growth in the US, and 61% of respondents said they are worried President-elect Donald Trump’s second term will have a long-term impact on the global economy.
The report showed that 97% of economists estimate an increase in the US public debt, while 94% expect persisting higher inflation and risks to remain.
Forecasts for growth in Europe remain the weakest for the third consecutive year, as 74% of the respondents expect it to be weak this year.
China’s growth momentum is expected to weaken due to stagnant consumer demand and declining production, resulting in a more uncertain global economic recovery. About 79% of the economists expect loose monetary policy in the country.
Some 64% of the respondents estimate a loose monetary policy in the US and 81% in Europe.
Meanwhile, the report revealed that 94% of economists expect global trade in goods to become more fragmented over the next three years and 59% expect a similar trend in services.
Domestic and international political developments, the restructuring of supply chains, and security concerns make up a significant portion of the global economic outlook, as these affect businesses and consumers over the next three years.
Some 91% of the respondents believe businesses will restructure their supply chains, 90% think businesses will regionalize operations, and 79% say they will focus on core markets.
Despite almost half of the respondents estimating global trade to grow this year, some 68% expect a trade war to emerge between the US and China, as protectionist trade, sanctions, national security concerns, technological advances, and global growth dynamics play at expanding the trade war.
“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,” said Aengus Collins, head of Economic Growth and Transformation at the World Economic Forum.
