Global Economic Outlook To Improve, But Uncertainty Remains -- WEF Report

KUALA LUMPUR, Sept 22 (Bernama) -- A majority, or 56 per cent, of chief economists surveyed expected the global economic outlook to remain stable or improve, a sharp improvement from May, when 89 per cent projected conditions to weaken, said the World Economic Forum (WEF) in its latest Chief Economists’ Outlook - September 2026. 

In a statement, WEF said the improvement would come with limited confidence that the stabilisation would hold. 

It said that nearly all respondents (97 per cent) named geopolitical conflicts as a likely source of uncertainty over the next year, 58 per cent expected asset-price corrections, and only one-quarter projected the global economy to become more resilient. 

“Chief economists expect the global economy to stabilise, but uncertainty remains high with geopolitical volatility, potential asset-price corrections, greater scrutiny of artificial intelligence (AI) investment and persistent cost-of-living pressures,” said WEF’s economic growth and transformation head Attilio Di Battista.

He said government support played a critical role in navigating successive crises, but fiscal capacity was likely to be more constrained going forward. 

“The priority now is to strengthen the foundations of resilience before the next shock arrives,” Di Battista said.

WEF said that over the next 12 months, only 28 per cent of surveyed economists anticipated fiscal support to remain the most significant source of resilience for the global economy, down from 69 per cent who cited it as the key support since 2020.

Instead, it said future resilience would likely depend increasingly on flexible supply chains, technological innovation and energy-market adaptation, with the United States (US) and China seen as best placed to withstand shocks. 

“Over the same period, 97 per cent of respondents anticipated AI adoption to increase, and 69 per cent expect the technology to unlock meaningful productivity gains. 

“Around eight in 10 (78 per cent) expect data centre investment to drive a significant share of global growth, but 79 per cent expect the expansion to face significant pushback from local communities,” it said.

At the same time, 61 per cent did not expect data centre investment to drive a significant share of global job creation, and majorities expected the expansion to raise electricity (78 per cent) and water (58 per cent) prices, it said.  

“The AI race between China and the US is expected to narrow, with 69 per cent expecting Chinese large language models to catch up to their US counterparts in the next 12 months,” it said. 

According to the report, meanwhile, 77 per cent of surveyed economists expected geoeconomic fragmentation to rise over the next year, with 55 per cent anticipating tariff increases in the US and 43 per cent in Europe. 

It said trade and investment would continue to adapt -- two-thirds expected global trade volumes to rise, and 83 per cent expected Chinese exports to markets outside the US to increase. 

Additionally, WEF said respondents anticipated higher living costs, led by food (88 per cent of respondents), electricity (83 per cent), and transport (77 per cent). 

It said most surveyed economists projected real incomes to decrease or stagnate across most regions, apart from Southeast Asia and India, where over 60 per cent of respondents anticipated increases. 

“Governments are expected to favour broad, visible responses: tax reductions on essential goods (60 per cent), consumption subsidies (54 per cent) and price caps (50 per cent) are viewed as most likely, while only 36 per cent expect tax reductions for low-income households and 26 per cent expect targeted cash transfers,” it added.

The survey featured in this edition was conducted from Aug 4-20, 2026. 

-- BERNAMA