Chief Economists Outlook January 2025

6Chief Economists Outlook The main impact of rising fragmentation that the chief economists highlight is a likely increase in costs for consumers and businesses. Collaboration on global challenges such as climate change is also expected to become more difficult. In response to these shifts in the global landscape, the chief economists expect multinational companies to respond with a range of adaptations, including changes to supply chains and organizational restructurings. The chief economists expect an intensification of trade-war dynamics in the years ahead, both between the US and China and more broadly. However, the expectation is also that trade volumes will continue to increase. There is consensus that protectionism will cause durable changes to trade patterns over the next three years, with conflict and national security concerns also highlighted as important drivers of change. The chief economists expect growing regionalization of trade, as well as a continuation of a gradual shift in the composition of trade from goods to services. In general, advanced economies tend to benefit more than developing economies from services trade, but a majority of the chief economists point to the increasing importance of services as a driver of economic development.