The global economic outlook has darkened considerably in recent months, with Africa and other emerging regions facing heightened risks amid escalating trade tensions, policy uncertainty, and geopolitical fragmentation, according to the latest Chief Economists Outlook published by the World Economic Forum (WEF).The WEF’s May 2025 report, based on a survey of leading chief economists from both the public and private sectors, highlights a period of extraordinary volatility and uncertainty. Nearly all respondents agreed that the global economy is set to weaken further this year, a notably gloomier forecast compared to late 2024.
The most pronounced shift in sentiment was seen in the United States, where the majority of economists now expect weak or very weak growth for the remainder of 2025, alongside rising inflation and a weakening dollar.A key driver of this pessimism has been a series of dramatic changes in US trade policy. In early April, the US announced unprecedented increases in import tariffs, including a baseline 10% tariff on most global goods and even higher rates for countries with significant trade surpluses with the US. Although most of these tariffs were paused for 90 days following market turmoil, the underlying uncertainty remains acute, especially as the pause is temporary and could be lifted at any time.Chief economists overwhelmingly agree that higher tariffs will fuel inflation and suppress global trade volumes.
The World Trade Organization (WTO) has already forecast that threatened tariffs could cause global merchandise trade volumes to contract by 0.2% this year. The survey found that 77% of economists expect higher tariffs to lead to higher inflation, and 89% expect stagnation or decline in global trade volumes.For Africa and other emerging regions, these global shocks are particularly concerning. The report notes that “the vulnerability of the global economy to adverse policy shocks and their follow-on effects can be significant,” with developing economies often bearing the brunt of disruptions in global value chains and financial flows.Africa, which relies heavily on global trade for both exports and imports, faces compounded risks from rising tariffs, supply chain disruptions, and currency volatility. The uncertainty is likely to exacerbate existing challenges such as high debt burdens, inflationary pressures, and limited fiscal space for policy responses.
The WEF report warns that persistent uncertainty and policy miscoordination could inflict significant economic damage, especially in regions with less diversified economies and weaker safety nets.The WEF survey also highlights the growing importance of political polarization and economic nationalism as drivers of the global outlook. Nearly all chief economists anticipate that political polarization will lead to suboptimal economic decision-making this year (95%), and 94% believe economic nationalism will increasingly drive policy. This dynamic is expected to accelerate geoeconomic fragmentation, with 98% of respondents predicting a faster pace of global economic decoupling along geopolitical fault lines.For Africa, this fragmentation could mean more volatile investment flows, reduced access to international markets, and increased exposure to external shocks.
The report underscores the need for African policymakers to diversify economies, build regional value chains, and strengthen institutional resilience in the face of global headwinds1.Amid these challenges, the rapid advance of artificial intelligence (AI) is adding both complexity and opportunity to the global landscape. While 45% of chief economists expect AI to be commercially disruptive in 2025, a similar proportion believe it could add up to five percentage points to global GDP over the next decade. However, the labor market outlook is mixed, with nearly half expecting net job losses and only 19% foreseeing net gains.For Africa, the adoption of AI and digital technologies could offer new avenues for growth and development, but only if accompanied by investments in skills, infrastructure, and inclusive policies.The WEF’s latest Chief Economists Outlook paints a picture of a world in flux, where Africa and other emerging regions must navigate a landscape marked by trade tensions, policy uncertainty, and rapid technological change. For policymakers and business leaders, the report emphasizes the importance of organizational agility, supply chain diversification, and workforce reskilling to build resilience in the face of ongoing disruption.As the global economy enters an age of uncertainty, Africa’s ability to adapt and innovate will be critical—not only for weathering current storms but for shaping a more sustainable and inclusive future.
