DAVOS, SWITZERLAND - The May 2024 Chief Economists Outlook explores key trends in the global economy, including the latest outlook for growth, inflation, monetary and fiscal policy, and the implications of recent geopolitical and domestic political developments. This series of reports draws on the individual and collective perspectives of a group of leading chief economists through consultations with the World Economic Forum’s Chief Economists Community and a regular Chief Economists Survey.

This latest edition of the Chief Economists Outlook launches amid a mood of cautious optimism about the global economy. This optimism is tempered by the uncertainty about geopolitical and domestic political developments, which are seen as sources of volatility this year. Despite some brightening of the near-term growth outlook, the latest results point to growing challenges for businesses and policy-makers. However, the views on the long-term prospects for the global economy are encouraging, with many policy opportunities to boost growth across high- and low-income economies.

Executive summary

The May 2024 Chief Economists Outlook launches amid a mood of cautious optimism about the global economy. Uncertainty persists, but signs of brightening are reflected in the latest survey, with a sharp fall in the share of chief economists expecting global conditions to weaken this year, from 56% in January to 17%.

There is near unanimity among respondents (97%) that geopolitics will be a source of global economic volatility in the remainder of 2024. With almost half of the world’s population heading to the polls this year, a large majority (83%) also expect domestic politics to be a source of volatility. Chief economists are more sanguine about the likely short-term impact of rapid technological advances, with over two-thirds against the idea that artificial intelligence (AI) will cause volatility this year. Regionally, the chief economists’ growth outlook has become more optimistic, although it remains patchy. The most notable uptick is expected in the US, with the share of respondents expecting moderate or stronger growth in 2024 rising to 97%
from 59% in January. The survey points to buoyant activity in the economies of Asia, with all respondents expecting at least moderate growth in South Asia and East Asia and Pacific. China remains an exception in Asia, with about three-quarters expecting moderate growth, up from 69% in January.

In Europe, the outlook remains broadly unchanged since the previous edition, and almost seven in 10 still foresee weak growth this year. Elsewhere in the world, broadly moderate growth is expected, with a slight improvement since the last edition. Inflation expectations continue to converge towards a broadly moderate outlook across most regions. This is driven, in part, by optimism about the condition of global supply chains, although, on the other hand, expectations for looser labourmarket conditions have weakened since January. Respondents expect monetary policy to become less synchronized over the remainder of 2024, with signs of loosening in some regions. The fiscal stance is expected to remain unchanged in most regions.

The latest survey focuses on the growing challenges confronting businesses and policy-makers. Almost four-fifths (79%) of chief economists said heightened complexity is a growing challenge for decision-makers, while even more (86%) said the same of tensions between political and economic dynamics.

When asked about the factors expected to drive corporate decision-making this year, core economic factors featured prominently in responses, including the overall health of the global economy (100%), monetary policy (86%), financial markets (86%) and labour market conditions (79%). A strong majority cited geopolitical (86%) and domestic political factors (71%). Almost twice as many chief economists (73%) highlight the role of companies’ growth targets in decisionmaking compared to their environmental and social targets (37%).

Turning to the longer-term prospects for the global economy, the results reveal further optimism, with almost seven in 10 respondents expecting global growth to return to 4% within the next five years, including 42% expecting it within the
next three years. Chief economists are unambiguous in expecting technological transformation, AI, and the green and energy transition to be growth drivers in high-income economies over the next five years, with more divided views regarding
the impact on low-income economies.

By contrast, geopolitics, domestic politics, debt levels, climate change and social polarization are all expected to have a negative impact on growth in both high- and low-income economies. When asked about the policies that are likely to be most effective at boosting growth in the next five years, respondents highlighted innovation, infrastructure development, education and skills improvement, and looser monetary policy as the most promising across the board. In several other policy areas, including institutions, social services and access to finance, a notably higher share of respondents sees them as effective growth drivers for low-income rather than high-income economies. The results also show a lack of consensus on how
environmental policy and industrial policy might affect growth.

For maps and infographics and the full report,visit: https://www3.weforum.org/docs/WEF_Chief_Economists_Outlook_May2024.pdf