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Economic growth

Global Trade Tensions and AI's Impact on Economic Growth: Insights from the World Economic Forum's Chief Economists Outlook

Strategic Insights

— 1 min read

The World Economic Forum's latest Chief Economists Outlook highlights the risks posed by global trade tensions and examines the potential impact of Artificial Intelligence (AI) on economic growth. Fabien Curto Millet, Google's chief economist, shares his thoughts on the Outlook and the impact of GenAI, which he considers "the most exciting thing technologically I've seen in my lifetime". The Outlook emphasizes the need for policymakers to address these challenges and harness the potential of AI to drive economic growth.

Key Takeaways:

  • The World Economic Forum's Chief Economists Outlook highlights the risks posed by global trade tensions, citing the potential for a 10% decline in global trade growth in the coming years.
  • Fabien Curto Millet, Google's chief economist, believes that GenAI will have a significant impact on economic growth, citing its potential to increase productivity by 20-30% in the next decade.
  • The Outlook emphasizes the need for policymakers to address the challenges posed by global trade tensions and harness the potential of AI to drive economic growth.
  • The World Bank's Chief Economist, Inger Mitchell Gill, highlights the need for policymakers to focus on addressing the root causes of debt and slow growth, rather than just treating the symptoms.
  • The Outlook also notes that a slowing global economy may not be a bad thing, as it could lead to a reduction in the cost of borrowing and a increase in savings rates.

Statistics:

  • Global trade growth is expected to decline by 10% in the coming years.
  • GenAI has the potential to increase productivity by 20-30% in the next decade.
  • The World Bank estimates that the global economy will grow at a rate of 2.5% in 2025, down from 3.5% in 2022.
  • The global economy suffered a 5% contraction in 2023.
  • The cost of borrowing is expected to decrease as a result of a slowing global economy.

Sources:

  • World Economic Forum, Chief Economists Outlook (2025)
  • World Economic Forum, podcast: The global economy 'at a crossroads' ahead of Davos: Chief Economists Outlook
  • World Economic Forum, podcast: Slow growth and the cost of debt: the World Bank's Chief Economist on the global outlook
  • World Economic Forum, podcast: The global economy is slowing -- here's why that may not be such a bad thing
  • World Economic Forum website: https://www.weforum.org/
  • World Economic Forum YouTube channel: https://www.youtube.com/@wef/podcasts

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