Cairo:The global economic outlook is seeing a modest improvement, despite ongoing geopolitical tensions and other challenges.
According to State Information Service Egypt, a World Economic Forum report highlighted that 56% of leading economists expect global economic conditions to remain stable or improve over the next 12 months. This marks a significant decline in the number of economists who foresee a deterioration, as compared to a survey conducted in May 2026. Concerns over rising inflation have also eased, though geopolitical tensions continue to be a major concern, cited by 97% of surveyed economists.
The report notes that while there is some optimism, only a few respondents believe the global economy will become more resilient to future shocks and crises. Apart from geopolitical tensions, other significant risks identified include potential declines in asset prices, rapid technological change, policy uncertainty, and trade and investment restrictions.
Public spending has played a crucial role in helping economies navigate several crises since 2020. However, sustaining this support has become challenging due to limited resources and fiscal pressures, with only 28% of respondents expecting government aid to continue at current levels. Many economists emphasize the importance of diversifying economic activities and strengthening supply chains to boost resilience.
Despite a reduction in inflation rates, essential goods and services are expected to remain costly. A majority of respondents anticipate price increases in food, electricity, transport, and fuel. This scenario is likely to exert pressure on household purchasing power, especially in regions like the Middle East and North Africa, Europe, and Latin America.
The report also discusses the potential of artificial intelligence to drive economic growth and productivity. While 69% of economists expect AI to improve productivity and 78% foresee data-center investments aiding global growth, there are concerns about job creation and local opposition due to high resource consumption.
Significant investment in energy and infrastructure is deemed necessary, with expectations of increased investment in nuclear power, renewables, and fossil fuels. However, there is also a risk of overinvestment in AI infrastructure due to demand uncertainties.
Global trade is moving towards greater fragmentation, with an increase in trade volumes and Chinese exports anticipated. Regionally, India and Southeast Asia show the strongest growth prospects, while expectations for China, Europe, and the United States vary based on economic trends.
In conclusion, while the global economy appears more stable, it faces persistent risks from cost-of-living pressures, geopolitical tensions, and other factors. Diversifying economic activities and investing in technology and infrastructure are deemed crucial for sustainable growth.