Centre for the New Economy and Society

Chief Economists
Outlook
May 2024
 Chief Economists Outlook

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 Chief Economists Outlook

Chief Economists Outlook

May 2024

This quarterly briefing builds on the latest policy

development research as well as consultations
and surveys with leading chief economists from
both the public and private sectors, organized
by the World Economic Forum’s Centre for the
New Economy and Society.

It aims to summarize the emerging contours

of the current economic environment and
identify priorities for further action by policy-
makers and business leaders in response to the
compounding shocks to the global economy
from geoeconomic and geopolitical events.

The survey featured in this briefing was

conducted in April 2024.

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 Chief Economists Outlook

Contents

Executive summary___________________________________________________________ 5

1. A mood of cautious optimism _______________________________________________ 7

Growth is weak, but building _________________________________________________ 7

Inflation is elevated, but easing ______________________________________________ 10

2. A challenging global landscape ____________________________________________ 13

Complexity is becoming a feature of the global economy ________________________ 13

Businesses navigate growing headwinds______________________________________ 14

Policy-makers calibrate their responses_______________________________________ 16

3. Long-term prospects _____________________________________________________ 19

The outlook for growth _____________________________________________________ 19

Policy priorities ____________________________________________________________ 22

References _________________________________________________________________ 26

Contributors ________________________________________________________________ 29

Acknowledgements__________________________________________________________ 30

Cover: Unsplash

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 Chief Economists Outlook

Executive summary

The May 2024 Chief Economists Outlook In Europe, the outlook remains broadly
launches amid a mood of cautious optimism unchanged since the previous edition, and
about the global economy. Uncertainty almost seven in 10 still foresee weak growth
persists, but signs of brightening are this year. Elsewhere in the world, broadly
reflected in the latest survey, with a sharp fall moderate growth is expected, with a slight
in the share of chief economists expecting improvement since the last edition.
global conditions to weaken this year, from
56% in January to 17%. Inflation expectations continue to converge
towards a broadly moderate outlook
There is near unanimity among respondents across most regions. This is driven, in
(97%) that geopolitics will be a source of part, by optimism about the condition of
global economic volatility in the remainder global supply chains, although, on the
of 2024. With almost half of the world’s other hand, expectations for looser labour-
population heading to the polls this year, a market conditions have weakened since
large majority (83%) also expect domestic January. Respondents expect monetary
politics to be a source of volatility. Chief policy to become less synchronized over the
economists are more sanguine about the remainder of 2024, with signs of loosening in
likely short-term impact of rapid technological some regions. The fiscal stance is expected
advances, with over two-thirds against the to remain unchanged in most regions.
idea that artificial intelligence (AI) will cause
volatility this year. The latest survey focuses on the growing
challenges confronting businesses and
Regionally, the chief economists’ growth policy-makers. Almost four-fifths (79%)
outlook has become more optimistic, of chief economists said heightened
although it remains patchy. The most notable complexity is a growing challenge for
uptick is expected in the US, with the decision-makers, while even more (86%)
share of respondents expecting moderate said the same of tensions between political
or stronger growth in 2024 rising to 97% and economic dynamics.
from 59% in January. The survey points to
buoyant activity in the economies of Asia, When asked about the factors expected to
with all respondents expecting at least drive corporate decision-making this year,
moderate growth in South Asia and East Asia core economic factors featured prominently
and Pacific. China remains an exception in in responses, including the overall health of
Asia, with about three-quarters expecting the global economy (100%), monetary policy
moderate growth, up from 69% in January. (86%), financial markets (86%) and labour

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 Chief Economists Outlook

market conditions (79%). A strong majority By contrast, geopolitics, domestic politics,

cited geopolitical (86%) and domestic debt levels, climate change and social
political factors (71%). Almost twice as many polarization are all expected to have a
chief economists (73%) highlight the role negative impact on growth in both high- and
of companies’ growth targets in decision- low-income economies.
making compared to their environmental and
social targets (37%). When asked about the policies that are likely
to be most effective at boosting growth in
Turning to the longer-term prospects for the next five years, respondents highlighted
the global economy, the results reveal innovation, infrastructure development,
further optimism, with almost seven in 10 education and skills improvement, and looser
respondents expecting global growth to monetary policy as the most promising
return to 4% within the next five years, across the board. In several other policy
including 42% expecting it within the areas, including institutions, social services
next three years. Chief economists are and access to finance, a notably higher
unambiguous in expecting technological share of respondents sees them as effective
transformation, AI, and the green and growth drivers for low-income rather
energy transition to be growth drivers in than high-income economies. The results
high-income economies over the next five also show a lack of consensus on how
years, with more divided views regarding environmental policy and industrial policy
the impact on low-income economies. might affect growth.

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 Chief Economists Outlook

1. A mood of cautious
optimism

Growth is weak, but building 56% of respondents said the global

economy would weaken this year, the latest
The outlook for the global economy survey sees that figure drop to 17%, with
is improving, according to the latest more than eight in 10 respondents now
World Economic Forum survey of chief expecting the global economy to strengthen
economists. Whereas in the January 2024 or remain unchanged over the remainder of
edition1 of the Chief Economists Outlook, 2024 (Figure 1).

Figure 1. The global economic outlook

Looking ahead to the remainder of 2024, what are your expectations for the future condition
of the global economy?

Much weaker Somewhat weaker Unchanged Somewhat stronger Much stronger

17 41 41

Share of respondents (%)

Note: The numbers in the graphs may not add up to 100% because figures have been rounded up/down.
Source: Chief Economists Survey, April 2024

The developing economic mood is one of outlook have begun to stabilize. However,
cautious optimism. Signs of recovery in these improvements take place against
the manufacturing sector,2 coupled with a backdrop of continuing high levels of
improvements in business and household uncertainty, not least because of global
confidence,3 have bolstered the view economic and geopolitical divergences
that the sharpest risks to the near-term and rifts.

1 World Economic Forum (2024b, January).

2 S&P Global (2024, April).
3 World Bank (2024b, April).

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 Chief Economists Outlook

In successive surveys, chief economists further intensification of concern around

have drawn attention to geopolitics, these trends (Figure 2). For example, it is
domestic politics and rapid technological now almost the unanimous view (97%) that
advances as among the most consequential geopolitical factors will be a source of global
global developments affecting the economic volatility this year, up from 90% in
economy. The latest survey reveals a September 2023.

Figure 2. Global context

Looking ahead to the remainder of 2024, do you agree/disagree with the following statements?

Strongly disagree Disagree Uncertain Agree Strongly agree

Geopolitical factors will be a source of

volatility in the global economy 3 38 59

Domestic political factors will be a source

10 7 59 24
of volatility in the global economy
Rapid development of Al will be a source 69 28 3
of volatility in the global economy
Share of respondents (%)

Source: Chief Economists Survey, April 2024

In a year when almost half of the world’s The chief economists’ expectation of
population will head to the polls, the chief overall stronger global conditions is subject
economists also highlight the growing to significant regional variation. This
economic importance of domestic political echoes the latest International Monetary
considerations, with 83% saying these will Fund (IMF) analysis, which upgrades
be a source of volatility this year. By contrast, the 2024 global growth forecast by 0.1
in artificial intelligence (AI), there is a strong percentage point to 3.2% but also points
consensus that it will not be a source of to widening regional divergences.4
volatility this year, and, as discussed later,
the chief economists also expect AI to be
a driver of growth in the global economy.

4 IMF. (2024c, April).

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 Chief Economists Outlook

Figure 3. Growth expectations

What is your expectation for economic growth in the following geographies in the remainder of 2024?

Very weak Weak Moderate Strong Very strong

South Asia 30 63 7

United States 3 52 38 7

East Asia and Pacific 68 32

Middle East and North Africa 33 54 13

Central Asia 9 82 9

Sub-Saharan Africa 29 63 8

Latin America and the Carribbean 24 72 4

China 21 75 4

Europe 3 66 31

Share of respondents (%)

Source: Chief Economists Survey, April 2024

The most notable improvement recorded growth this year, up to 70% from 52% in the
in the latest survey is in the outlook for the previous edition. In East Asia and Pacific,
US. Chief economists are almost unanimous the improvement is less pronounced and is
(97%) in expecting at least moderate mostly driven by an increase in the share of
growth in 2024, a marked jump in optimism respondents expecting moderate growth.
compared to the 59% recorded in January. China remains an exception among the Asian
Moreover, this uptick is driven by a jump in economies, with only 4% of respondents
the share of respondents expecting strong pointing to strong growth for 2024, as weak
or very strong growth this year, from 3% to consumption and property market worries
45%. The brightening in the outlook is in line weigh on near-term prospects.6
with encouraging data releases in the early
months of 2024.5 That said, renewed inflation In Europe, economic activity remains
concerns, as well as interlocking geopolitical lacklustre. This is the sixth consecutive
and domestic political factors, may weigh on edition of the Chief Economists Outlook in
the outlook in the remainder of 2024. which Europe records the weakest regional
prospects. In part, this reflects mounting
Chief economists foresee consistently short-term economic and geopolitical
buoyant activity in the economies of Asia, pressures, but it is also a factor of structural
with 100% of respondents now expecting challenges that are likely to weigh on
moderate or stronger growth in the remainder the region for years to come, including a
of 2024. For South Asia, in particular, there protracted slowdown in the manufacturing
was a marked increase in the share of sector,7 an ageing population and growing
respondents expecting strong or very strong signs of fiscal strain.

5 OECD. (2024, May).

6 IMF. (2024b, April).
7 S&P Global. (2024, March).
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 Chief Economists Outlook

Elsewhere in the world, the expectations are for Global headline inflation is now projected to
broadly moderate growth, with a slight increase settle at 5.9% in 2024 and 4.5% next year,
in respondents’ optimism since the last edition. down from 6.8% in 2023.8 Core inflation is
The most pronounced increase can be seen in declining, too, despite the stubbornness of
Central Asia, where 91% now expect moderate price rises for core services.9 However, it is
or higher growth, compared to 84% in January. worth noting that despite these disinflationary
In Latin America and the Caribbean, the developments, elevated price levels continue
pattern is similar, with the share of respondents to weigh on households, particularly in the US,
expecting at least moderate growth, increasing where consumer sentiment dropped by 10
from 70% to 76%. About seven out of 10 points to 67.4 between April and May 2024.10
respondents also foresee moderate or higher
growth in Sub-Saharan Africa in 2024, a slight Moreover, these global figures mask varying
improvement from January. regional patterns and prospects. Broadly
speaking, the advanced economies appear
The outlook for the Middle East and North to be in a better position. For example,
Africa remains largely unchanged since the inflation is on track to return to target in
previous edition. Economic activity in much of 2025 in the US and possibly even this year
the region is being hit by headwinds related to in Europe.11 By contrast, many emerging
conflict, but about two-thirds of respondents market and developing economies face
still expect at least moderate growth this year. stubbornly high rates, averaging a projected
8% in 2024.12 Similar patterns of divergence
Inflation is elevated, but easing are reflected in the latest survey results
(Figure 4), although the expectations
The trajectory of global inflation has been continue to converge towards moderate
broadly benign in the first half of 2024. inflation across most regions.

Figure 4. Inflation expectations

What is your expectation for inflation in the following geographies in the remainder of 2024?

Very low Low Moderate High Very high

Sub-Saharan Africa 10 43 43 5

Latin America and the Carribbean 9 59 32

South Asia 17 58 21 4

United States 15 63 22

Europe 25 57 18

Middle East and North Africa 19 67 14

Central Asia 32 63 5

East Asia and Pacific 43 57

China 35 46 19

Source: Chief Economists Survey, April 2024 Share of respondents (%)

8 IMF. (2024c, April).

9 J.P. Morgan. (2024, February).
10 University of Michigan (2024, May).
10
11 IMF. (2024c, April).
12 Ibid.
 Chief Economists Outlook

About two-thirds of chief economists now expect low inflation. In both cases,
still expect moderate inflation in the US, this marks an increase of more than 10
unchanged since January, whereas there percentage points since January.
has been an increase (to 22%) in the share
of respondents expecting high inflation. For It is worth noting that inflation forecasts
Europe, the outlook is broadly unchanged currently remain unusually vulnerable
since the last edition, with 57% expecting to revision given the prevailing level of
moderate inflation and a quarter expecting uncertainty and the elevated risk of shocks.
low inflation this year. China remains a Some of the disruptions highlighted in
notable outlier in terms of deflationary risks. the previous edition (such as heightened
About 81% of respondents expect low or climate volatility, the impact of El Niño and
very low inflation this year, with the share commodity pressures) are already having an
of those expecting very low inflation almost impact to a varying extent across different
doubling to 35% since January. sectors and geographies. The geopolitical
landscape also remains febrile, and
The results point to a slight increase in according to one estimate, an escalation of
high-inflation expectations for Latin America conflict in the Middle East could cause oil
and the Caribbean (32%) and for South prices to spike by up to 30%, a development
Asia (25%), although in both regions the that would accelerate inflation and dampen
majority still point to moderate inflation. global growth.13 More generally, the global
For Sub-Saharan Africa, the expectation trading system remains vulnerable to
of problematic inflation is even more shocks. For example, despite a marked
pronounced, with almost half of respondents trend towards diversification and localization
expecting high or very high inflation, while of supply chains in recent years, almost
another 43% foresee moderate inflation 20% of global trade in goods still happens
in the region. Elsewhere in the world, between geopolitically unaligned economies,
expectations of lower inflation have solidified with the share reaching 40% for highly
somewhat. In East Asia and Pacific and in concentrated products.14
Central Asia, 43% and 32%, respectively,

Figure 5. Global context

Looking ahead to the remainder of 2024, do you agree/disagree with the following statements?

Strongly disagree Disagree Uncertain Agree Strongly agree

Labour market conditions will loosen in

17 52 31
most advanced economies
Global supply chains pressures will be a major
3 45 28 24
source of disruption to business activity
Share of respondents (%)

Source: Chief Economists Survey, April 2024

13 World Bank. (2024a, April).

14 McKinsey. (2024, January).

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 Chief Economists Outlook

Despite the prevalence of risks to the conditions may continue to push up on

global economy, it is notable that the chief prices in some parts of the world. The latest
economists remain relatively sanguine on survey points to a significant shift in chief
the condition of global supply chains, which economists’ expectations on labour market
have been a key source of upward price conditions this year, with the proportion of
pressures in recent years. Only a quarter respondents expecting labour markets to
of respondents expect major disruption loosen in advanced economies falling sharply
in 2024, compared to 48% who disagree from more than three-quarters to one-third
(Figure 5). On the other hand, labour market since the last edition.

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 Chief Economists Outlook

2. A challenging
global landscape

Complexity is becoming a feature to heightened volatility and continue to

of the global economy reshape patterns of economic activity in
profound ways. This makes for a particularly
Deep uncertainty has characterized the challenging environment for decision-makers
global landscape in recent years, and in government and business, and almost
there appears to be little prospect of a eight in 10 chief economists (79%) expect
near-term return to greater predictability. heightened complexity to be a growing
International conflicts, growing social challenge for decision-makers as 2024
strains, technological shifts and tight progresses (Figure 6).
financial conditions have all contributed

Figure 6. Growing challenges

Looking ahead to the remainder of 2024, do you agree/disagree with the following statements?

Strongly disagree Disagree Uncertain Agree Strongly agree

Tensions between political and economic considerations will be

a growing challenge for business and economic decision-makers 10 3 55 31

Heightened complexity (economic, political, etc.) will be a

10 10 48 31
growing challenge for business and economic decision-makers
Differences between economic data and sentiment will be a 17 41 31 10
growing challenge for business and economic decision-makers

Source: Chief Economists Survey, April 2024

The increasing polarization and volatility Accordingly, 86% of chief economists see
of domestic politics in many countries tensions between politics and economics as
have been an important contributor to this a growing challenge for decision-makers.
complexity, and the wave of elections across
the globe in 2024 intensifies its destabilising One notable recent development in many
potential. There are already indications that countries – especially the US – has been the
businesses are hedging against the potential emergence of divergence between modestly
for sharp policy swings if power changes encouraging economic data and stubbornly
hands.15 Moreover, this domestic political gloomy public sentiment. Core economic
instability is compounded by the deteriorating indicators – including growth, inflation,
international political environment. employment and stock market performance

15 The Economist. (2024, January).

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 Chief Economists Outlook

– have all shown signs of improvement since sentiment divergence to be a challenge for
the pandemic, but economic sentiment has decision-makers, with a similar proportion
remained weak. uncertain on this point.

Multiple factors are likely to be driving this Businesses navigate growing

divergence. The latest chief economists headwinds
survey results point to a number of potential
drivers, from price levels and inequality The backdrop of growing complexity poses
to heightened uncertainty about political, numerous challenges for businesses.
social and technological developments. While business decisions are likely to vary
This divergence may be a temporary given the era of heightened instability, the
phenomenon, with greater time needed for latest chief economists survey provides an
hard-data improvements to be reflected in indication of some of the key factors that
brightening sentiment. However, around four are expected to drive corporate decision-
in 10 chief economists expect the data- making this year (Figure 7).

Figure 7. Factors driving corporate decision-making

Which of the following factors are likely to drive corporate decision-making in the
remainder of 2024?

Extremely unlikely Somewhat unlikely Neither likely nor unlikely Somewhat likely Extremely likely

Overall health of the economy 55 45

Monetary policy decisions 14 55 31

Financial market conditions 14 62 24

Geopolitical factors 4 11 25 61

Labour market conditions 21 55 24

Companies' growth targets 28 52 21

Domestic political factors 11 18 39 32

Regulatory environment 3 34 38 24

Supply chain conditions 10 34 31 24

Companies' environmental 34 28 34 3
and social targets
Share of respondents (%)

Source: Chief Economists Survey, April 2024

Unsurprisingly, core economic factors feature making, and the overwhelming majority
most prominently. There is unanimity among of respondents also pointed to the role of
respondents on the overall health of the monetary policy (86%), financial markets
global economy being a driver of decision- (86%) and labour market conditions (79%).

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 Chief Economists Outlook

Perhaps more notably, there is also a strong There is also considerable regulatory
consensus on the importance of geopolitical uncertainty surrounding major
and domestic political factors. About 86% areas of economic activity, AI to
of respondents agree that geopolitics will climate policy and trade.
drive corporate decision-making this year,
with the proportion viewing this as extremely Looking at the role of companies’
likely (61%) significantly higher than for any performance targets in decision-making
other factor cited, including companies’ for the remainder of 2024, almost three-
growth targets. In line with this trend, quarters of respondents highlighted the
about 71% of chief economists also expect role of corporate growth targets. This is
businesses strategies to be shaped by much higher than the proportion (37%)
domestic political factors. that expect companies’ environmental and
social targets to drive decision-making this
Both of these results highlight increasing year. This pattern echoes ongoing debates
interconnectedness between global about the relevance and effectiveness of
political and economic developments and environmental, social and governance (ESG)
uncertainty about the extent of political and and similar frameworks focused on shifting
geopolitical risks. There are signs that some corporate priorities. In a recent survey
businesses are focusing on preparedness of chief executive officers three-quarters
for potential disruptions ahead. Corporate expressed scepticism about ESG while
bond issuance has spiked to its highest 23% reported de-prioritizing sustainability
since the 1990s, suggesting that businesses in the last 12 months due to challenging
are trying to secure their financing before economic conditions or a greater focus on
a period of market turbulence.16 Given the other priorities.18 However, there may be an
systemic importance of developments in important distinction between short-term and
the US, the forthcoming election is weighing long-term priorities here. Over a three-year
on corporate decision-making. Morgan horizon, the same survey found 43% of chief
Stanley points out that the share of investors executive officers highlighting decarbonizing
concerned about the US election reached their business model and achieving net-
31% in the first quarter of 2024, up from zero as an important strategic priority.
26% at the end of 2023.17
Against this backdrop of numerous challenges
Despite the role of geopolitics, a smaller for corporate decision-makers, the latest
proportion of respondents (55%) expect survey of chief economists asked which
supply-chain conditions to be a driver of strategies businesses might adopt in response
corporate decision-making this year. This to low growth and heightened volatility in 2024.
is likely, in part, a reflection of the steps Four answers featured most prominently:
businesses have already taken to restructure 1) adjustment of supply chain strategies,
their supply chains in recent years. Almost including localization and diversification
two-thirds of chief economists also cited into new geographies, 2) improving internal
the regulatory environment as a driver of efficiency and shifting to leaner business
decision-making, perhaps unsurprising given models, 3) investing in innovation and human
the connection between political volatility capital to unlock productivity growth, and 4)
and regulatory upheaval. greater caution in capital allocation.

16 Clarfelt. (2024, March).

17 Morgan Stanley. (2024, April).
18 Guerzoni et al. (2024, April).
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 Chief Economists Outlook

Policy-makers calibrate Chief economists expect monetary policy to

their responses become less synchronized over the remainder
of 2024, with possible pivots in the tightening
The resilience and agility of policy-makers cycle in some geographies (Figure 8). A strong
continues to be stretched and tested too. majority expects a loosening of monetary
The twin pressure of growing global fractures policy in Europe (86%). The corresponding
and deepening interconnectedness of figures are slightly lower for China (67%) and
economics and politics have increased the the US (61%), and in both cases around a
pressure on fiscal and monetary policy- third of respondents expect the policy stance
makers as they seek to sequence and to remain unchanged this year.
calibrate their interventions.
These results are broadly in line with the
A globally synchronized cycle of monetary latest central bank communications. While
policy tightening proved effective at taming the Federal Reserve has noted that it is
the worst of the recent inflationary spike in assessing the trajectory of inflation and labour
many advanced economies without causing market developments,19 the expectation
significant contraction in economic activity. of an imminent interest rate cut in Europe
However, as the global backdrop remains is strong in part because of hints in that
fraught with uncertainty and risks, policy- direction from the ECB.20 The slow recovery
makers are still proceeding cautiously and in China also means that policy-makers might
continue to navigate trade-offs between use monetary policy levers to buck tepid
tightening too much and too little. At the consumption and production dynamics.
time of writing, market expectations of
multiple rate cuts by the Federal Reserve Views are divided on the monetary policy
and European Central Bank (ECB) this year outlook for Latin America and the Caribbean
are being tempered by markedly cautious and East Asia and Pacific with almost the
communication from the central banks, same share of respondents foreseeing looser
which could signal that policy-makers are and unchanged conditions. Elsewhere in
girding for looming risks. the world, the expectations point to policy
continuity throughout 2024.

19 Federal Reserve. (2024, May).

20 Reid. (2024, April).

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 Chief Economists Outlook

Figure 8. Monetary policy outlook

Looking ahead to the remainder of 2024, what is your expectation for monetary policy in
the following geographies?

Looser Unchanged Tighter

Europe Central Asia

14
United States
China
7 37
63
61 32 86 33
East Asia
Middle East and 5 South Asia 67 and Pacific
North Africa
35 5 9
60
Latin America and
the Caribbean 38 57 45
45
Sub-Saharan Africa
54 46 5
25

81 70

Source: Chief Economists Survey, April 2024

Fiscal policy-makers face significant On the current trajectory, global public

challenges too. Tepid growth prospects, debt is set to reach almost 100% of gross
combined with high interest rates and domestic product (GDP) by 2029,21 up
growing international fractures, limit from about 93% today and 84% in 2019.22
policy-makers’ capacity to offset potential The near-term pressures are growing too,
shocks and create space for much needed with debt servicing costs spiking by 10% in
investments and structural reforms, developing economies, and by almost 40%
particularly in developing markets. in low-income economies, in 2023-2024.23

21 IMF. (2024a, April).

22 Ibid.
23 World Bank. (2023, December).

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 Chief Economists Outlook

Figure 9. Fiscal policy outlook

Looking ahead to the remainder of 2024, what is your expectation for fiscal policy in the
following geographies?

Looser Unchanged Tighter

Europe Central Asia

21 5
United States 32 25 China
7
26 8
46 25
70
East Asia
Middle East and 16 South Asia
67 and Pacific
North Africa 26 67
19 19 5
30
Latin America and
the Caribbean 58 53

19 10 62
Sub-Saharan Africa 65
5 11

71
81
84

Source: Chief Economists Survey, April 2024

Looking at the trajectory for fiscal policy in thirds of respondents expecting further
the remainder of 2024, chief economists loosening by the end of the year, which is
expect most regions to maintain their current in line with government efforts to ramp up
fiscal policy stance (Figure 9). For example, stimulus packages to revive consumption
about two-thirds of respondents foresee and business confidence. For Europe, the
policy continuity in the US as policy-makers results reveal a notable lack of consensus,
contend with challenging international and with 32% expecting fiscal tightening, 21%
domestic conditions. China is an exception expecting loosening and 46% expecting
to the broad global trend, with about two- unchanged conditions.

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 Chief Economists Outlook

3. Long-term prospects

The outlook for growth falling from 6% to less than 2%.25 The
IMF warns that without the right policies,
Many of the global developments that have the world is heading into a historically low
been highlighted as sources of heightened growth period with five-year growth rate
volatility and complexity in this and recent settling at 2.8% by 2030, significantly below
editions of the Chief Economists Outlook – the historical average of 3.8%.26 Among the
including geopolitical rifts and technological challenges that will need to be overcome if
transformation – have profound and far- growth is to accelerate again are a worrying
reaching implications for the future pace decrease in total factor productivity,27 as
and trajectory of the global economy. well as declines in capital formation and
With this in mind, the latest survey of chief labour force participation.
economists assesses the prospects for
global growth in the next five years, and The latest survey results reveal some
asks which are the most promising policy optimism among chief economists about
levers for reviving growth across high- the prospects of a sustained rebound in
income and low-income economies. global growth (Figure 10). Almost seven
out of 10 expect global growth to return
Global growth has lost steam since the start to 4% within the next five years, with 42%
of the century. In advanced economies, expecting it within the next three years.
estimates suggest that GDP growth has However, a sizeable minority (23%) of chief
declined from an average of 2% in the early economists were much more pessimistic,
2000s to less than 1.5% after COVID-19.24 stating that global growth will never return
The deceleration is much more pronounced to 4%, pointing to the past era of higher
in emerging and developing economies growth as having been an anomaly rather
over the same period, with GDP growth than the norm.

Figure 10. Expectations of growth rebound

When do you expect global growth rates to cross and sustain rates above 4%?

Never After 5 years Between 3 and 5 years Between 1 and 3 years Within the next year

23 8 27 42

Share of respondents (%)

Source: Chief Economists Survey, April 2024

24 World Economic Forum. (2024c, January).

25 Ibid.
26 IMF. (2024c, April).
27 Ibid.

19
 Chief Economists Outlook

When asked about the positive and negative in low-income economies. Although a solid
impact of various global developments on majority (60%) still expect technological
the trajectory of global growth over the next transformation to have a positive impact, there
five years (Figure 11), respondents were is less consensus on AI, with 46% expecting
unambiguous in viewing technology as a key a positive impact but another 46% saying
positive growth driver, particularly for high- it will be neutral. The divided views on the
income economies. About 85% of respondents potential growth impact of technology between
said technological transformation (excluding AI) high-income and low-income economies are
will have a positive impact on economic growth broadly consistent with estimates suggesting
in high-income economies, with 81% saying the level of AI preparedness is almost twice as
the same about AI. The views are slightly high in advanced economies compared to low-
more divided about the impact of technology income economies.28

Figure 11. Impact of global trends on growth

Which developments are likely to have positive or negative impact on economic growth
in the next five years?

Negative Neutral Positive

High-income economies 15 85
Technological
transformation (excl. Al) Low-income economies 16 24 60

High-income economies 19 81
Artificial intelligence
Low-income economies 8 46 46

High-income economies 11 19 70
Green and energy
transition Low-income economies 12 46 42

High-income economies 67 22 11
Debt levels
Low-income economies 69 23 8

High-income economies 54 35 12
Climate change
Low-income economies 60 28 12

High-income economies 67 30 4
Demographic shifts
Low-income economies 15 27 58

High-income economies 69 27 4
Social polarization
Low-income economies 60 36 4

High-income economies 85 15
Geopolitical factors
Low-income economies 72 12 16

High-income economies 63 37
Domestic political factors
Low-income economies 64 28 8

Share of respondents (%)

Source: Chief Economists Survey, April 2024

28 Cazzaniga et al. (2024, January).

20
 Chief Economists Outlook

Only a slightly lower share of respondents factors to have a negative impact on growth
(70%) expects the green and energy for high- and low-income economies alike,
transition to have a positive impact on echoing the role of these factors in the
growth in high-income economies. The heightened global complexity discussed in
views for low-income economies are once the previous section. Geopolitical factors
again divided, with 42% saying the transition feature prominently too, with 85% saying
will be beneficial to growth and another they will be detrimental for growth in high-
46% saying it will be neutral. In part this income economies, and 72% for low-
reflects the complexity of the transition for income economies. This is in line with stark
lower-income economies, which, on the projections from the IMF that growing global
one hand, have lower emissions compared fractures could lead to worst-case economic
to their high-income counterparts, but, losses equivalent to 7% of global GDP.30
on the other hand, face high social and
economic costs from the process of global Another area where there is a notable
decarbonization.29 There is much stronger divergence between chief economists’
consensus on the impact across high- and expectations for high- and low-income
low-income economies when it comes countries is demographic change. About
to climate change, with 54% and 60% of two-thirds of respondents think demographics
respondents foreseeing a negative impact will have a negative impact on growth in
on growth in high-income and low-income high-income economies, while 58% expect a
economies, respectively. positive impact in low-income countries. This
divergence in expected outcomes reflects the
Looking at other developments, about two- differing ways that ageing, youth populations
thirds of respondents expect debt levels, and migration trends are playing out in
social polarization and domestic political different parts of the world.

29 World Economic Forum. (2024a, January).

30 Bolhuis et al. (2023, March).

21
 Chief Economists Outlook

Figure 12. Industries driving growth

Looking at the next five years, which sectors and industries are likely to be a significant
driver of global growth?

Extremely unlikely Somewhat unlikely Neither likely nor unlikely Somewhat likely Extremely likely

Information technology and

4 26 70
digital communications
Low-carbon energy (incl. renewables) 8 8 33 50

Medical, healthcare and care services 7 11 33 48

Leisure and travel 4 20 64 12

Engineering, construction and utilities 15 19 50 15

Mining (excl. fossil fuels) 8 16 20 44 12

Supply chain and transport services 12 32 52 4

Manufacturing 8 44 44 4

Fossil-fuel energy and materlals 12 24 20 40 4

Retall and wholesale of consumer goods 12 46 38 4

Financial, professional, real estate services 4 19 35 38 4

Agriculture, forestry and fishing 29 29 21 13 8

Share of respondents (%)

Source: Chief Economists Survey, April 2024

The survey also asked chief economists Policy priorities

about the industries most likely to drive global
growth in the next five years (Figure 12). The long-term prospects for growth hinge on
The answers were in line with respondents’ the capacity of policy-makers to put in place
views on the importance of the growth of the necessary foundations for sustained
technology and the green transition. The economic activity. This means leveraging
sectors seen as having the strongest positive appropriate structural reforms and finding the
effect on growth were information technology fiscal space to balance resource allocation
and digital communications, low-carbon between acute needs and policies designed
energy (including renewables), and medical, to unlocking long-term progress. According
healthcare and care services. A strong to one estimate, productivity growth could
majority also expects leisure and travel and have been 50% higher today if misallocation
engineering and construction to support of capital and labour had been addressed
growth. There was a lack of consensus in recent decades.31 In a similar vein,
on the role of other industries, including despite current headwinds, the World Bank
mining, supply chain and transport services, estimates that anaemic growth trends can
manufacturing, fossil-fuel energy and still be reversed in this decade with tailored
materials, retail and wholesale of consumer policy approaches.32
goods, and financial, professional and real
estate services.

31 IMF. (2024c, April).

32 World Bank. (2023, March). 22
 Chief Economists Outlook

Figure 13. Growth policy levers

Looking at the next five years, which policy levers are likely to be most effective for
boosting economic growth?

Extremely ineffective Ineffective Neutral Effective Extremely effective

Stronger innovation High-income economies 4 8 54 35

ecosystem and
R&D support Low-income economies 9 13 43 35

High-income economies 4 8 54 35
Education and sklls
development Low-income economies 4 35 61

High-income economies 4 12 50 35
Improved infrastructure
Low-income economies 4 30 65

High-income economies 44 15 46 31
Increased labour market
flexiblity Low-income economies 9 9 48 35

High-income economies 9 17 57 17
Looser monetary policy
Low-income economies 18 23 36 23

High-income economies 4 23 38 35
Improved access
to finance Low-income economies 52 48

High-income economies 4 35 38 23
Stronger institutional
environment Low-income economies 5 9 32 55

High-income economies 4 44 36 16
Trade liberalization
Low-income economies 22 39 39

Stronger social services High-income economies 8 46 31 15

and socal protection (care,
Low-income economies 9 9 50 32
health, housing, etc.)

High-income economies 4 16 44 28 8
Stronger environmental
polices Low-income economies 5 23 41 23 9

High-income economies 20 48 28 4
Targeted industry-specific
support Low-income economies 9 14 36 36 5

High-income economies 21 50 21 8
FIscal consolidation
Low-income economies 4 22 22 39 13

High-income economies 42 33 21 4
Trade protectionism
Low-income economies 45 36 18

Share of respondents (%)

Source: Chief Economists Survey, April 2024

23
 Chief Economists Outlook

The latest survey asked chief economists for markets and developing economies can
their views on which policies would be the boost foreign direct investment (FDI) inflows
most effective at boosting growth over the to these countries by 32% and increase
next five years. Their answers highlighted GDP by 1.9% in the medium term.35
policy levers related to fundamental A comparable increase in infrastructure
development components: innovation, spending could add 0.6% to the GDP of an
infrastructure, institutions, education, social average low-income economy.36
services and access to finance (Figure 13).
For many other policy levers, a notably
In terms of policies viewed as highly higher share of respondents expects a
effective across both high- and low-income greater impact on growth in low-income
economies, innovation, infrastructure and compared to high-income economies. These
education and skills stand out. About 89% include improvements in the institutional
of respondents said high-income economies environment, access to finance, labour
could benefit significantly from a stronger market flexibility and social services. The
innovation ecosystem and research and pattern is slightly more pronounced for
development (R&D) support, with only a trade liberalization, with about two-thirds of
slightly lower share of respondents (79%) respondents saying it will drive growth for
saying the same for low-income economies. low-income economies, compared to just
According to one estimate, each $1 spent 52% for high-income economies. On the
on innovation policies can boost long-term other hand, there is little divergence on trade
growth by $4.33 An increase in the share of protectionism, with 75% and 81% seeing it
R&D expenditure to GDP by 0.5 percentage as ineffective for growth in high-income and
points can also boost the GDP of an average low-income economies, respectively.
advanced economy by 2%.34
Looser monetary policy is viewed as a
More than eight out of 10 chief economists broadly effective driver of medium-term
expect education and skills development growth across both high-income (74%) and
policies (89%) and improved infrastructure low-income economies (59%). However,
(85%) to be effective in crafting new growth the results reveal uncertainty about fiscal
opportunities in high-income economies. consolidation’s impact on growth. For high-
Respondents are even more optimistic income economies, in particular, the views
about the role of these policies in low- are widely dispersed, with 29% saying it is
income economies, with 96% and 95% of effective, 21% ineffective and 50% neutral.
respondents foreseeing significant potential The views are slightly more optimistic
in education and skills development and for low-income economies, with a slight
improved infrastructure, respectively. One majority (52%) saying fiscal consolidation is
estimate suggests that a 1 percentage point an effective way to boost growth in the next
increase in education spending in emerging five years.

33 IMF. (2024a, April).

34 Ibid.
35 Ibid.
36 Ibid.

24
 Chief Economists Outlook

The survey also shows a lack of consensus or composition of economic activity has
on how environmental policy and industrial the potential for driving better growth, with
policy might affect growth, with a high degree a better balance between the quantity and
of uncertainty and near-equal numbers seeing quality of growth. According to the World
them as ineffective or effective policy levers. Economic Forum’s The Future of Growth
Policy in these areas is informed by goals Report 2024, the world is only halfway to
and values that are distinct from growth and fully innovative, inclusive, sustainable and
responding to the world's growing challenges resilient growth.37 Arguably, these factors are
requires more than a simple increase in the emerging as key long-term growth targets if
growth rate. Yet a focus on the character national and global challenges are to be met.

37 World Economic Forum. (2024c, January).

25
 Chief Economists Outlook

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Cazzaniga, M., Jaumotte, F., Li, L., Melina, G., Panton, A., Pizzinelli, C., Rockall, E., &
Mendes Tavares, M. (2024, January 14). Gen-AI: Artificial intelligence and the future
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Clarfelt, H. (2024, March 31). Companies rush to issue bonds to forestall market volatility
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 Chief Economists Outlook

Contributors

The World Economic Forum would like to thank the members of the Community of Chief
Economists for their thought leadership and guidance. We also thank the members of the
broader core community of the Centre for the New Economy and Society for their ongoing
commitment and contributions to addressing several of the factors presented in this outlook.

Figures are based on 29 survey responses. We would like to thank, in particular, all
community members who completed the survey and contributed to this edition of the
outlook through community discussions.

We are grateful to our colleagues in the Centre for the New Economy and Society for helpful
suggestions and comments, in particular to Jesse Caemmerer, Philipp Grosskurth and
Sriharsha Masabathula, in the Economic Growth and Transformation team, and Attilio Di
Battista and Eoin Ó Cathasaigh. Thank you to Martha Howlett and Laurence Denmark for
copyediting, graphic design and layout.

The views expressed in this briefing do not necessarily represent the views of the World
Economic Forum nor those of its Members and Partners. This briefing is a contribution
to the World Economic Forum’s insight and interaction activities and is published to elicit
comments and further debate.

World Economic Forum

Aengus Collins, Head, Economic Growth and Transformation,

Centre for the New Economy and Society

Kateryna Karunska, Insight Lead, Economic Growth and Transformation,

Centre for the New Economy and Society

Saadia Zahidi, Managing Director, World Economic Forum and Head,

Centre for the New Economy and Society

29
 Chief Economists Outlook

Acknowledgements

Members of the Community of Chief Economists

André Almeida, SONAE Carsten Fink, World Intellectual Property

Organization (WIPO)
Mansueto Almeida, Banco BTG Pactual
David Folkerts-Landau, Deutsche Bank
Musaab Almulla, Saudi Aramco
Indermit Gill, The World Bank
Shusong Ba, Hong Kong Exchanges and
Clearing Limited (HKEX) Tyler Goodspeed, ExxonMobil

Rima Bhatia, Gulf International Bank Pierre-Olivier Gourinchas, International

BSC (GIB) Monetary Fund (IMF)

Svenja Gudell, Indeed

Marieke Blom, ING Group

Jérôme Haegeli, Swiss Re Management

Philipp Carlsson-Szlezak, Boston
Consulting Group Karen Harris, Bain & Company

Tomas Castagnino, Accenture Janet Henry, HSBC Holdings

Juan Cerruti, Banco Santander Fernando Honorato Barbosa, Banco

Bradesco
Samy Chaar, Bank Lombard Odier
Beata Javorcik, European Bank for
Ahmet Çimenoglu, Koç Holding
Reconstruction and Development (EBRD)

Pedro Conceição, United Nations Ira Kalish, Deloitte

Development Programme (UNDP)
Seisaku Kameda, Sompo Institute Plus
Fabien Curto Millet, Google
Christian Keller, Barclays
Gregory Daco, EY-Parthenon
Steffen Kern, European Securities and
Eralp Denktas, Eczacıbaşı Holding Markets Authority

Erica Diniz Oliveira, Ifood.com Razia Khan, Standard Chartered Bank

Paul Donovan, UBS Raja Asad Khan, Saudi National Bank

30
 Chief Economists Outlook

Karin Kimbrough, LinkedIn Ralph Ossa, World Trade Organization

(WTO)
Kyle Kretschman, Spotify
Eric Parrado, The Inter-American
Barret Kupelian, PwC Development Bank

Valérie Lemaigre, The Swiss Bank of Erik Peterson, Kearney

Geneva (BCGE)
Sandra Phlippen, ABN AMRO
Gordon Liao, Circle Internet Financial
Renan Pinheiro Silverio, Petroleo Brasileiro
Mario Magalhães Carvalho Mesquita, - PETROBRAS
Itaú Unibanco
Saad Rahim, Trafigura
Jens Magnusson, Skandinaviska Enskilda
Debora Revoltella, European Investment
Banken (SEB)
Bank (EIB)
Giulio Martini, Lord Abbett
Nela Richardson, Automatic Data
Huw McKay, BHP Group Processing (ADP)

Guy Miller, Zurich Insurance Nadir Salar Qureshi, Engro

Gilles Moëc, AXA Investment Michael Schwarz, Microsoft

Millan Mulraine, Ontario Teachers’ Jorge Sicilia, BBVA

Pension Plan
Graham Slack, A.P. Møller-Maersk

Dhiraj Nayyar, Vedanta Resources

Ludovic Subran, Allianz

Dirk-Jan Omtzigt, United Nations Office Eirik Waerness, Equinor

for the Coordination of Humanitarian Affairs
(OCHA) Coram Williams, Adecco Group

31
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