Chief Economists Outlook January 2025

16Chief Economists Outlook 32 Rogers, T. N. (2024). 33 World Bank. (2024a). 34 The Economist. (2024b).Figure 8. Economic impact What changes do you expect to the following US economic and financial indicators under the new US administration? Source: Chief Economists Survey. (2024, November).Share of respondents (%)3 33 12 9 315 82 Stock market indicesPublic debt levels Consumer price inflation Wage levels91 3 74 6 35 62 15 56 29 9 91Unemployment rate Tax ratesStrong decrease Decrease No change Increase Strong increase This is in line with a strong consensus that the new administration’s campaign platform would be highly inflationary. Key elements that could be expected to drive prices higher include the stimulus effect of lower taxes (expected by 91% of chief economists) and the impact on wages and prices of the labour supply shock that would result from a maximal implementation of a promised programme of mass deportations.32 Potential tariff increases would add even more pressure (see section 4). It is notable that inflation expectations in the US ticked up in the weeks following the election.33 The chief economists are near-unanimous (97%) in their expectation that public debt levels will rise, pointing to a lack of confidence that tax cuts will be matched by a promised drive to cut public spending, which is being spearheaded by a new high- profile advisory commission (the Department of Government Efficiency).34