The World Economic Forum (WEF) finds in its latest 'Chief Economists’ Outlook' publication that 53% of respondents expect global economic conditions to weaken in the year ahead, down from 72% of chief economists that expected such in September last year.

This shows the relative resilience of the global economy despite turbulence, the WEF states.

Chief economists are, however, concerned about sovereign debt levels in advanced economies and emerging economies alike, with nearly a third of respondents citing concerns about advanced economy debt levels and half of the respondents being worried about emerging economy debt levels.

More than 60% of chief economists surveyed globally expect governments to rely on higher inflation and tax revenues to manage elevated debt this year.

The global economic outlook has improved modestly but remains uncertain, with asset valuations, mounting debt, geoeconomic realignment and rapid AI deployment creating both opportunities and risks, WEF says.

"The Chief Economists survey reveals three defining trends for 2026: surging AI investment and its implications for the global economy; debt approaching critical thresholds with unprecedented shifts in fiscal and monetary policies; and trade realignments,” explains WEF MD Saadia Zahidi.

She adds that governments and companies will have to navigate an uncertain near-term environment with agility while continuing to build resilience and invest in the long-term fundamentals of growth.

Managing elevated debt levels has become a central challenge for policymakers, WEF finds, particularly as spending pressures rise.

The organisation reports that defence spending is almost unanimously expected to increase, with 97% of chief economists surveyed anticipating rises in advanced economies and 74% in emerging markets.

Digital infrastructure and energy spending are also expected to rise.

Most other sectors are expected to see stable levels of spending, while a majority of surveyed economists anticipate spending on environmental protection to decline in both advanced (59%) and emerging economies (61%).

Views are split equally on the likelihood of sovereign debt crises in advanced economies, while nearly half of respondents (47%) see them as likely in the year ahead in emerging economies.

A large majority of chief economists expect governments to rely on higher inflation to reduce burdens (67% in advanced economies; 61% in emerging markets).

Tax increases are also viewed as likely by 62% of chief economists for advanced economies and 53% for emerging markets.

Some 53% of chief economists anticipate seeing debt restructuring or default as a debt management strategy in emerging markets over five years, compared to just 6% for advanced economies.

AI & ASSET VALUATIONS
Concentrated AI stock gains are splitting the views of the chief economists. A narrow majority (52%) are expecting AI-related US stocks to decline over the next year, but 40% foresee further increases.

Should values fall sharply, 74% of chief economists surveyed believe impacts would spread across the global economy. Cryptocurrencies face bleaker prospects, with 62% of respondents anticipating further declines following market turbulence, while 54% believe gold has peaked after recent rallies.

When it comes to the potential expected returns from AI, there is wide variation across regions and sectors.

Roughly four in five chief economists expect productivity gains within two years in the US and China.

Chief economists expect the information technology sector to adopt AI fastest, with nearly three-quarters anticipating imminent productivity gains.

The WEF reports that financial services, supply chain, healthcare, engineering and retail follow as “fast-movers”, with one- to two-year timelines. By firm size, the chief economists expect companies with more than 1 000 employees to see gains earlier than others, while 77% of chief economists surveyed expect meaningful productivity gains within two years.

In respect of employment, two-thirds of chief economists expect modest job losses over the next two years as a result of AI, but views diverse over the longer term with 57% of chief economists expecting net losses in jobs over ten years. Only 32% of chief economists surveyed foresee job gains as new occupations around AI emerge.

TRADE FLOWS & REGIONAL GROWTH
The WEF further finds that global trade and investment are adjusting to a new, competitive reality.

Chief economists expect import tariffs between the US and China to remain mostly stable, though competition could intensify in other domains. Most respondents (91%) expect US tech export restrictions to China to remain or increase and 84% of respondents anticipate the same for Chinese critical mineral restrictions.

In this new context, 94% of chief economists expect more bilateral trade deals and 69% anticipate growth in regional trade agreements.

About 89% of chief economists expect Chinese exports into non-US markets to further increase, but they are split on the future of global trade volumes.

Meanwhile, almost half of the respondents foresee the continued rise of international investment flows, and 57% expect foreign direct investment into the US to increase compared to 9% who expect increased inflows to China.

When it comes to growth expectation among the chief economists surveyed, South Asia leads with 66% of respondents anticipating strong or very strong performance in this region owing to robust growth in India.

Just under half (45%) of respondents expect strong growth and 55% expect moderate growth in East Asia and the Pacific.

Some 36% of respondents expect strong growth and 64% moderate growth in the Middle East and North Africa region.

The US outlook improved notably between the prior survey and the current survey, with 69% expecting moderate growth compared with 49% in September 2025, but only 11% expect strong growth.

The WEF says China faces mixed prospects, with 47% of chief economists expecting moderate growth and 24% expecting strong growth, while 29% of them expect weak growth.

Europe faces the weakest outlook, with 53% of respondents expecting weak growth, 44% moderate growth, and only 3% anticipating strong growth.