The World Economic Forum (WEF) states that while the outlook for the global economy is increasingly fractured and faces considerable pressure, artificial intelligence (AI) is predicted to be a major driver of growth in the coming years.
In its newly released title entitled “Chief Economist Outlook,” WEF warned that increasing economic nationalism and unstable tariffs have deepened uncertainty and hindered long-term decision-making across the major economies.
“The global economic outlook has been deteriorating since the beginning of the year,” WEF said, pointing to differences in performance in the weaker North American prospects, cautious European optimism and resilient Asia-Pacific region.
A significant majority (79%) of economists surveyed believe that current geopolitical and economic developments reflect fundamental structural changes rather than merely temporary disruptions.
WEF Managing Director Saadia Zahidi called for “larger adjustments, strategic agility and investments to transformative technologies such as AI” to manage economic headwinds and ensure future resilience.
The report highlighted that 82% of chief economists view global uncertainty as extremely high. Trade policy was cited by 97% as the most unpredictable factor, followed by monetary policy (49%) and fiscal policy (35%).
This uncertainty already affects core economic indicators, with 70% expecting global trade volumes to decline, 68% expecting GDP growth to decline and 62% expecting reductions in foreign direct investment.
Debt sustainability has emerged as an increasing concern, with 74% warning of rising risk in both developed and developing countries. Additionally, 86% of economists expect the government to expand its borrowing to fund potentially increasing defense budgets at the expense of public services and infrastructure.
Despite the headwinds, the report highlights the potential of AI to drive the next phase of economic change. Almost half (46%) of the Chief Economists surveyed expect a modest GDP upward of up to 5% points over the next decade from AI, while 35% predict profits of 5-10 points.
Key areas of impact include task automation (68%), faster innovation (62%), and workers’ enhancement (49%). However, concerns continue. 47% expect AI to lead to net losses, but only 19% predict a rise in net employment.
The misuse of AI – especially in disinformation and social instability – adds to the list of economic risks identified by respondents (53%), as well as an increase in market concentration (47%) and confusion in established business models (44%).
To realize the benefits of AI, economists have urged governments to prioritize infrastructure investments (89%), industry-wide adoption (86%), talent mobility (80%), and workforce upskills (75%). Meanwhile, businesses should focus on AI integration into core AI operations (95%), employee reskills (91%), and leadership preparation (83%). – May 28, 2025
