The global economic outlook has deteriorated sharply in recent weeks, according to the latest edition of the World Economic Forum’s Chief Economists’ Outlook published today.
Nearly nine in ten chief economists surveyed expect global growth to weaken over the next 12 months, reversing the cautious optimism seen at the start of the year, as conflict in the Middle East and the closure of the Strait of Hormuz fuel concerns over a major global economic shock, said a World Economic Forum press release.
Chief economists already rank the current closure duration of the Strait of Hormuz as significantly more disruptive than last year’s tariff turmoil. If the closure persists into the second half of the year, they expect its impact could approach the severity of the COVID-19 crisis, compounding effects across global supply chains, energy and food costs. An overwhelming 94% of the surveyed chief economists expect global inflation to increase over the coming year.
“Only months ago, the Chief Economists community was cautiously optimistic. The conflict in the Middle East changed that, and the economic scarring from the situation thus far is already expected to last into the months ahead,” said Saadia Zahidi, Managing Director, World Economic Forum. “The longer the disruption lasts, the heavier the long-term cost for those who can least afford it.”
The fallout is expected to hit the Middle East and North Africa region the hardest. After being viewed as one of the brighter economic regions only months ago, 88% of the surveyed chief economists now expect weak or very weak growth – the sharpest regional reversal in the survey.
Elsewhere, the outlook is mixed: inflation expectations have climbed sharply in sub-Saharan Africa, now the highest of any region surveyed, while Europe faces mounting stagflation risks as growth weakens and inflation fears mount. By contrast, India and the United States are expected to remain relatively resilient, supported by domestic demand and investment.
Despite the sharp deterioration, the survey does not point to a significant downturn. Most of the chief economists do not expect a recession within the next 12 months, even as they see little prospect of the economy growing more resilient in the near term. Much will depend on the length of the disruption: a shorter shock could leave room for recovery, while a prolonged closure would deepen the strain on the global economy.
Financial markets are expected to come under increasing strain, with 79% of respondents anticipating rising volatility in private debt markets over the next year, as signs of stress in private credit emerge; 74% also expect public debt market volatility to increase and 68% expect stock market volatility to increase.
AI remains a source of tailwinds in the global economy, with 92% of chief economists expecting greater artificial intelligence adoption over the coming year. However, optimism about the speed of productivity gains from AI adoption has now become more measured.
The Chief Economists’ Outlook report supports the Forum’s Future of Growth Initiative, enabling dialogue between business and government on growth in the new economy.
Meanwhile, the 17th Annual Meeting of the New Champions is taking place in Dalian, People’s Republic of China from 23 to 25 June 2026, WEF stated in a press note.
The meeting to be held under the theme “Innovating at Scale” will likely gather over 1,500 leaders from across-sectors. They will likely explore how innovation and emerging technologies can unlock new growth models and drive positive economic momentum in a fast-shifting global landscape.
