AMNC25: Economists warn of global slowdown amid geopolitical and trade tensions

TIANJIN: At the World Economic Forum’s Annual Meeting of the New Champions 2025 in Tianjin, China, leading economists struck a cautious tone, warning that escalating global uncertainty, driven by conflict in the Middle East and shifting trade policies, poses significant risks to economic growth worldwide.

AI Brief

Leading economists at WEF 2025 in Tianjin warned that rising global uncertainty, driven by Middle East conflicts and shifting trade policies, poses serious risks to global economic growth.
Huang Yiping highlighted Chinas resilience with projected Q2 growth above 5%, but cautioned about vulnerabilities from the property sector and external shocks, especially U.S. trade policy and geopolitical instability.
Paul Gruenwald noted that uncertainty is dampening investment and consumer confidence globally, with the U.S. economy showing erratic growth but avoiding recession, and emphasized the need for clarity in trade and conflict resolution to restore momentum.

During the high-level Chief Economists Briefing, Huang Yiping, Dean of the National School of Development at Peking University, emphasized that “uncertainty, not just deglobalization or trade protectionism, is the real drag on economic sentiment.”

He noted that while China’s economy continues to show resilience, forecasting second-quarter growth above 5%, headwinds remain, particularly from the struggling property sector and a volatile external environment.

“We still face a property sector undergoing adjustment and a very uncertain outside world, while real indicators like exports and production are holding up, weak signals from PMI, CPI, and private investment suggest risks ahead,” Huang said.

Despite the economic headwinds, he credited policy-driven support for maintaining domestic consumption and propping up short-term resilience.

However, Huang cautioned that China’s economy will remain vulnerable to external shocks, particularly stemming from geopolitical instability and changes in US trade policy.

Paul Gruenwald, Global Chief Economist at S&P Global, echoed these concerns, pointing specifically to the Israel-Iran conflict and U.S. tariff policies as major sources of disruption.

He highlighted how businesses and consumers are reacting to the unpredictability.

“Uncertainty has been the theme this year. Firms are hesitant to invest, consumers are cautious, and we’ve seen significant pullbacks in markets like mergers and acquisitions,” Gruenwald stated.

According to Gruenwald, the US economy experienced erratic growth in early 2025, with a 0.2% GDP contraction in Q1 due to frontloaded imports in anticipation of tariffs.

He expects this to reverse in Q2 with a rebound to 3-4% growth, averaging out to a modest 1.5-2% for the year, a slowdown, but not a recession.

The session underscored a common theme among policymakers and economists: clarity on global trade and conflict resolution is essential to restoring.