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The global economy is expected to face a challenging year in 2026, according to the World Economic Forum's latest Chief Economists' Outlook released this month. While confidence has improved slightly compared to last year, more than half of leading economists still believe global economic conditions will weaken in the coming months.
The survey showed that 53 per cent of chief economists expect the world economy to slow down, while only 19 per cent see stronger growth ahead. "With 53 per cent of chief economists expecting global economic conditions to weaken, 28 per cent expecting no change and 19 per cent expecting a stronger economy, the prospects for the global economy tilt towards the negative in the year ahead, albeit with improved sentiment compared to last year's outlook," the survey report read. Rising risks from high debt levels, inflated asset prices, and ongoing geopolitical tensions continue to weigh on the outlook. Trade disputes and shifting alliances are also reshaping global investment and supply chains. Financial markets have remained strong despite these risks, especially in the United States, where stocks linked to artificial intelligence (AI) have surged. However, economists are divided on whether these high valuations can last. Some warn of possible asset bubbles and sudden market corrections, while others argue that today's leading tech firms are more profitable and better funded than those during past market crashes. At the same time, traditional safe-haven assets such as gold have gained popularity as investors seek protection from uncertainty. Debt has become a major concern for governments and businesses worldwide. Years of heavy borrowing have pushed public and private debt to high levels, forcing policymakers to make difficult choices. Spending on defence, digital infrastructure, and energy is expected to rise, while budgets for areas such as education, social protection, and environmental programmes may face pressure, it said. Global trade is also adjusting to a more fragmented world. Countries are increasingly turning to regional and bilateral trade agreements to secure access to critical resources and technologies. As a result, some regions are expected to benefit, while others may struggle with protectionist measures and policy uncertainty. Artificial intelligence stands out as both a major opportunity and a source of disruption. Economists expect AI to boost productivity over time, but the benefits will not be evenly shared. Adoption is moving faster in advanced economies and large firms, while smaller businesses and developing regions may lag behind. The impact on jobs remains uncertain. (ANI)
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