The Cabinet’s Information and Decision Support Center highlighted a World Economic Forum report on the global economic outlook amid geopolitical tensions, trade and investment restrictions, high living costs and limited government spending capacity, alongside the rapid expansion of artificial intelligence and its opportunities and challenges.The report found a modest improvement in sentiment among leading economists, with 56% expecting global economic conditions to remain stable or improve over the next 12 months.The share expecting a deterioration fell significantly from the May 2026 survey, while concerns over rising inflation also eased.
However, only a limited number of respondents expect the global economy to become more resilient to shocks and crises.The report said geopolitical tensions remain the top risk to the global economy, cited by 97% of surveyed economists as a major concern.Meanwhile, 58% saw a risk of declines in some asset prices after reaching elevated levels, while 44% pointed to rapid technological change and policy uncertainty, and 42% to trade and investment restrictions, as factors that could weigh on global growth in the period ahead.
On the role of governments, the report said public spending and support had helped economies weather several crises since 2020.However, sustaining that role has become more difficult amid limited resources and mounting fiscal pressures, with only 28% of respondents expecting government support to continue at the same level in the period ahead.Meanwhile, 78% of leading economists said diversifying economic activity and strengthening supply chains’ resilience to shocks are the most effective ways to boost economic resilience, alongside innovation and technological development.
The report said lower inflation does not necessarily mean lower living costs, with prices of essential goods and services still expected to rise.Some 88% of respondents expect food prices to increase, 83% electricity costs, 77% transport costs and 71% fuel and heating prices.
Household purchasing power is also expected to remain under pressure, particularly in the Middle East and North Africa, Europe, and Latin America and the Caribbean.The report highlighted AI’s potential to boost economic growth and productivity, with 69% of leading economists expecting wider AI adoption to deliver productivity gains and 78% expecting data-center investment to support global growth.Yet 61% do not expect such investment to create a comparable number of jobs, while 79% said data centers could face local opposition over their high electricity and water consumption.
The report said AI and data-center expansion will require major energy and infrastructure investment, with 83% expecting increased investment in nuclear power, 80% in renewables and 70% in fossil fuels.Meanwhile, 42% see a risk of overinvestment in AI-related infrastructure amid uncertainty over future demand.On global trade, the report said the world economy is moving toward greater fragmentation among countries and economic blocs, without halting the growth of international trade.
Some 77% of respondents expect further fragmentation over the next year, while 67% anticipate higher global trade volumes and 83% expect Chinese exports to increase. Regionally, growth prospects appear strongest in India and Southeast Asia, while expectations for China, Europe and the United States vary depending on growth, inflation and economic policy trends.
The report concluded that the global economy is relatively more stable, but risks persist in new forms, including cost-of-living pressures, geopolitical tensions, trade and investment restrictions, limited fiscal space and rapid technological change.It said diversifying economic activity, strengthening supply-chain resilience, and investing in technology, innovation, energy and infrastructure will be critical to withstanding shocks and supporting more sustainable growth.
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