The short-term outlook for the global economy has begun to stabilize, but many vulnerabilities remain. A majority of the chief economists surveyed (54%) expect the condition of the global economy to remain unchanged over the next year, but four times as many expect conditions to weaken (37%) rather than to strengthen (9%).
The regional outlook remains varied. South Asia is a clear stand-out performer, with seven out of 10 chief economists expecting strong or very strong growth in 2024 and 2025. The outlook for the US economy is broadly positive, with almost nine out of 10 chief economists expecting moderate or better growth over the same period. By contrast, almost three-quarters of respondents expect only weak growth in Europe this year with a modest improvement in 2025. In China, almost four in 10 respondents expect weak or very weak growth both this year and next.
The combination of elevated debt levels and high interest rates has pushed interest payments into economically damaging territory for many countries. There are 54 developing countries that spend more than 10% of total revenues on debt servicing, and 3.3 billion people live in countries that spend more on debt interest than on education or health.41 Even advanced economies are seeing the profile of public spending being significantly affected: in the US, the cost of debt servicing ($870 billion) is projected to surpass the country’s defence spending ($822 billion) this year.
Chief economists were asked to assess whether a trade-off exists between growth and four other potential policy goals: environmental sustainability, economic equality, social cohesion and national security. On equality and security, only 12% of respondents said a significant trade-off exists. That figure rises to 21% for social cohesion. Only environmental sustainability shows a meaningful split among respondents, with equal proportions of 44% agreeing and disagreeing that a trade-off exists.
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