The global economy is showing signs of stabilisation, but geopolitical tensions, potential asset-price corrections, rising living costs and uncertainty around artificial intelligence investment continue to cloud the outlook, according to the World Economic Forum’s latest Chief Economists’ Outlook.
The September 2026 report found that 56 per cent of surveyed chief economists expect global economic conditions to remain stable or improve over the next 12 months. This marks a significant shift from May, when 89 per cent expected conditions to weaken.
However, confidence in the durability of the improvement remains limited. Nearly all respondents, or 97 per cent, identify geopolitical conflicts as a likely source of uncertainty over the coming year, while 58 per cent anticipate asset-price corrections. Only one-quarter believe the global economy will become more resilient.
“Chief Economists expect the global economy to stabilize, but uncertainty remains high with geopolitical volatility, potential asset-price corrections, greater scrutiny of AI investment and persistent cost-of-living pressures,” said Attilio Di Battista, Head of Economic Growth and Transformation at the World Economic Forum.
“Government support played a critical role in navigating successive crises, but fiscal capacity is likely to be more constrained going forward. The priority now is to strengthen the foundations of resilience before the next shock arrives.”
Fiscal support gives way to new sources of resilience
Fiscal support has been the biggest source of economic resilience since 2020, according to 69 per cent of the economists surveyed.
That role is expected to diminish significantly. Only 28 per cent expect fiscal support to remain the main source of resilience over the next 12 months, as governments face more limited fiscal capacity.
Instead, economists expect resilience to increasingly depend on flexible supply chains, technological innovation and adaptation in energy markets.
The United States and China are viewed by respondents as being best positioned to withstand economic shocks.
AI adoption expected to accelerate
Artificial intelligence is expected to remain a major driver of economic change over the coming year. Some 97 per cent of chief economists expect AI adoption to increase, while 69 per cent anticipate the technology will generate meaningful productivity gains.
Data centres are also expected to play a growing role in the global economy. Around 78 per cent of respondents believe data-centre investment will account for a significant share of global growth.
However, the expansion is expected to face challenges. Some 79 per cent anticipate significant pushback from local communities, while 78 per cent expect increased data-centre demand to put upward pressure on electricity prices. Another 58 per cent expect water prices to rise.
The employment impact is less certain, with 61 per cent of economists saying they do not expect data-centre investment to generate a significant share of global job creation.
The technology race between the US and China could also become more competitive. Some 69 per cent of respondents expect Chinese large language models to catch up with their US counterparts over the next 12 months.
Cost-of-living pressures remain
Despite the improved global economic outlook, economists expect households to continue facing cost pressures.
Food prices are expected to rise by 88 per cent of respondents, followed by electricity prices at 83 per cent and transport costs at 77 per cent.
Most economists also expect real incomes to stagnate or decline across most regions. South-East Asia and India are notable exceptions, with more than 60 per cent of respondents expecting real incomes to increase in each.
Governments are expected to favour broad measures to address cost-of-living pressures. Sixty per cent of economists anticipate tax reductions on essential goods, while 54 per cent expect consumption subsidies and 50 per cent expect price caps.
By comparison, 36 per cent expect governments to reduce taxes specifically for low-income households, while only 26 per cent anticipate targeted cash transfers.
The findings suggest that while the immediate global outlook has improved, the foundations supporting the recovery remain exposed to geopolitical, technological, fiscal and cost-of-living pressures.