The latest report on the global economic outlook indicates a sharp deterioration in growth expectations due to geopolitical tensions and supply chain disruptions. According to the World Economic Forum survey published on May 28, 2026, nearly nine in ten chief economists expect global growth to weaken over the next 12 months. Meanwhile, only 13% of respondents anticipate a global recession during this period.
Geopolitical Pressures on the Global Economic Outlook
The closure of the Strait of Hormuz has emerged as a primary driver of economic concern, with 94% of surveyed economists expecting global inflation to rise. This disruption affects energy and food costs, impacting the broader economy and global supply chains. If the closure persists into the second half of the year, economists expect its impact could approach the severity of the COVID-19 crisis. This situation ranks as more disruptive than the previous year’s tariff turmoil.
“Only months ago, the Chief Economists community was cautiously optimistic. The conflict in the Middle East changed that, and the economic scarring from the situation thus far is already expected to last into the months ahead,”
Saadia Zahidi, Managing Director, World Economic Forum
Regional Growth Disparities
The Middle East and North Africa region faces the sharpest reversal, with 88% of respondents now predicting weak or very weak growth. Meanwhile, Europe faces stagflation risks, whereas India and the United States are projected to remain resilient due to domestic demand. In addition, inflation expectations have climbed sharply in sub-Saharan Africa, marking the highest rate among all surveyed regions.
Financial Market Volatility and Debt Risks
Financial markets are projected to experience increased instability over the coming year. Specifically, 79% of economists anticipate rising volatility in private debt markets, while 74% expect public debt volatility to increase, and 68% project stock market fluctuations. These figures indicate growing concern over private credit stability under current conditions.
Artificial Intelligence Adoption and Productivity
Technology remains a key factor in the global economic outlook, with 92% of economists expecting greater artificial intelligence adoption. However, expectations regarding the speed of productivity gains from AI have cooled across most sectors, including engineering and healthcare. Notably, information technology and education are the only sectors where productivity expectations remained steady. In contrast, delayed gains are expected in construction, utilities, and medical services.
The survey was conducted between April 6 and 17, 2026, involving leading economists from both public and private sectors. These findings will inform discussions at the upcoming Annual Meeting of the New Champions in Dalian, China, scheduled for June 23 to 25, 2026.
