The economy of the world has been taken with caution by the world’s leading economists because half of them believe that the situation will be worse next year, though less than half of them saw it at 72 per cent in September of 2025, the most recent Chief Economists Outlook by the World Economic Forum.

According to the report, 19 per cent of economists project the global economy to improve, whereas 28 per cent project no improvement, with an expectation of a more positive outcome in September 2025, when it is projected that only 11 per cent would be stronger.

“According to the survey of Chief Economists, three trends are expected by 2026: the explosion of AI spending and its consequences to the global economy; debt moving towards critical levels with unprecedented changes in fiscal and monetary policy; trade realignments,” World Economic Forum press release by Saadia Zahidi.

She furthered by saying, “governments and companies will need to balance a precarious near-term environment with agility, remain resilient, and invest in the long-term fundamentals of growth.”

The report is based on a comprehensive consultation and survey of the chief economists of the state and the business sector, arranged by the Centre of the New Economy and Society of the World Economic Forum. 

The survey indicates the uncertainty of technology-led growth. Although artificial intelligence (AI) has been spurring market rallies, half of the economists now believe that the stocks associated with AI will fall, versus 40 per cent who believe it will continue to rise.

According to the report, the fast adoption of AI is perceived as a cause of optimism and a possible disruptive force. It says, “Although it is a commonly accepted fact that substantial productivity gains can be made, the rate and spread of these gains will differ significantly across regions, industries and firm sizes.”

Debt levels are also becoming a fault line in the world. In high-quality economies, almost a third of respondents are afraid of sovereign debt crises, which increases to almost half in emerging markets. Over 60 per cent anticipate governments to turn to higher inflation and higher tax revenues to cope with the growing debt levels.

The report states that global public debt had reached a record high of 102 trillion in 2024, and it is estimated to increase by approximately 100 per cent of the gross domestic product (gross domestic product) by 2029.

The survey also indicates that global trade is coming into a more competitive phase. As the US (US)-China tariff rates should not be changed dramatically, 91 per cent of the chief economists believe that the US technology export restrictions on China will either stay the same or rise, and 84 per cent believe the same about critical minerals restrictions by China.

In this regard, nearly 94 per cent of economists anticipate an increase in bilateral trade agreements, and 69 per cent believe that the regional agreements would be on the rise, with 89 per cent forecasting a massive growth in Chinese exports to non-US markets.

Investment trends are also going divergent, whereby 57 per cent of them are more likely to invest in the US through foreign direct investment as compared to 9 per cent of those in China.