Chief Economists Outlook January 2025

5Chief Economists Outlook Executive summary The January 2025 edition of the Chief Economists Outlook launches at the start of what is likely to be an eventful year for the global economy. The outlook remains subdued, with a majority of chief economists (56%) expecting the global economy to weaken over the next year, compared to 17% anticipating improvement. Expectations for global growth are muted overall but subject to significant regional divergence. The US economy is expected to deliver robust growth in 2025, and South Asia, particularly India, is also expected to maintain strong growth. The outlook for Europe remains gloomy, with 74% of respondents predicting weak or very weak growth this year. The outlook for China also remains weak, and growth is projected to slow gradually in the years ahead. Global inflation is easing, with the International Monetary Fund (IMF) projecting an annual average of 4.3% in 2025, down from 5.8% in 2024. However, services inflation remains higher than goods inflation, particularly in advanced and emerging- market economies. Moderate inflation is expected in most regions, but the uptick in the short-term outlook for growth in the US has been accompanied by a significant increase in inflation expectations, according to the chief economists. The chief economists expect US policy to have a significant impact on the global economy in the years ahead. A majority (61%) characterize this impact as a long-term shift rather than a short- term disruption. Under the incoming administration, the chief economists expect significant changes across trade, migration, deregulation, fiscal policy, industrial policy and foreign policy. Large majorities expect to see increases in inflation and public debt levels, as well as stock-market gains. The global economic landscape is increasingly fragmented. This is particularly true for goods trade, where 94% of chief economists expect further fragmentation over the next three years. Significant majorities also expect increased barriers to labour mobility and transfers of technology and data. Geopolitical rivalries and domestic policy choices are viewed as the key drivers of current fragmentation trends, highlighting the growing importance of interactions between political and economic factors.