What does the World Economic Forum’s 2025 Chief Economists Outlook say about global growth, inflation, and tariffs under a second Trump term?

Will trade wars and “friend-shoring” slow global GDP by 2030, according to the World Economic Forum’s Chief Economists Outlook?

World Economic Forum Chief Economists Outlook: why 2025 sentiment turns negative, what a second Trump term could mean for tariffs, inflation, debt, and how trade wars may reshape globalization and growth to 2030. Keep reading to see the report’s key forecasts, the highest-impact policy risks, and the practical implications for business leaders, investors, and anyone planning for 2025–2030.

Recommendation

While economic growth has been robust in areas like South Asia and the United States in 2024, expected changes from the Trump second term across numerous fronts — in regulatory, trade, fiscal, industrial, and foreign policies — are already exerting downward pressure on the world’s economies. So says this global survey of economists by the World Economic Forum’s Centre for the New Economy and Society, which suggests that tariffs will not only affect trade but also relations among countries. Growth may thus slow over the longer term, as the world faces what could be more isolationist and nativist geopolitics. Business leaders and financial professionals will find this an enlightening report.

Take-Aways

• Economists’ perspectives on the health of the global economy in 2025 are mostly negative.
• The change in US administration will play an outsized role in the trajectory of the world’s economy.
• Trade relations and globalization will come under increased tension.

Summary

Economists’ perspectives on the health of the global economy in 2025 are mostly negative.

A survey of economists around the world reveals that, while growth rates will diverge across regions, the prospect of inward-looking economic and foreign policy in the United States will have negative second-order effects on many economies. An estimated global GDP growth of 3.2% in 2025 will slow to 3.1% by 2030, a markedly weak forecast. Economists expect persistent inflation in many areas.

“The outlook for the global economy remains subdued and downside risks have intensified, not least because of heightened uncertainty around the economic implications of November’s [2024] US presidential election.”

Central banks’ hawkish stance has abated, particularly in the European Union, where sluggish growth persists. However, the US Federal Reserve will likely hold the line on interest rate cuts in the face of inflation for the foreseeable future. Fiscal policy will remain accommodative, with rising debt levels due to higher spending on national security, social insurance for aging populations, and climate change.

The change in US administration will play an outsized role in the trajectory of the world’s economy.

The actions of the second Trump administration will herald not only short-run turmoil but also longer-term, multidimensional policy shifts. Trade conflicts, deregulation, and restrictions on migration reflect a culmination of trends underway since the 2008 global financial crisis. A political trifecta of a Republican-controlled presidency and both houses of Congress only solidifies these developments. The speed and degree of change warrant caution, however; while more than two-thirds of economists surveyed anticipate trade policy changes, about 90% contend that tariffs will end up being lower than those bandied about during the presidential campaign.

“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).”

Tax-cutting initiatives, increased spending, a tight labor market, and a robust equity market will help stoke inflation. Nonetheless, consumer sentiment on inflation could be a check on the new administration’s fiscal policy actions. Near-term growth could trend downward, should looser fiscal policy persist.

Trade relations and globalization will come under increased tension.

The likely proliferation and heightened intensity of trade wars will strain relations among countries, affecting the flow of both goods and services. Nativist leanings against immigration will have negative impacts on worker mobility. This fragmentation, along with greater government focus on national security, will act as a brake on the international exchange of technology and knowledge, as well as on foreign direct investment and asset flows.

“Among all the indications of…economic fragmentation…the erosion of support for the global trading system is the most prominent.”

The end result will likely be higher costs for households and businesses, as firms increasingly reshore and “friend-shore.” A corollary to these developments includes shifts in trade among countries whose geopolitics are more closely aligned, furthering an ongoing trend toward regionalization.

About the Author

The World Economic Forum’s Centre for the New Economy and Society is a research arm that promotes global economic growth, equity, and human capital.