2026 prospects and risks

In 2026, GDP growth is projected at 2.5-3.1%, lower than in the pre-pandemic period of roughly 3.7%. However, it does not reflect recessionary averages. The climate of uncertainty will continue to extend its shadow in the new year. Inflation will be moderate with high public debt, geopolitical risks and trade conflicts.

According to the Organisation For Economic Cooperation And Development (OECD) the outlook for 2026 will be defined by three macro-economic variables; first, the trajectory of the Fed's policy, second the US-China trade relationship developments that will shape supply chain, trade routes, FDI flow in Asia, Europe and the Middle East; and third, the political realignments in US elections and transitions in European leadership will influence sectors of strategic prominence like trade, defence, climate and regulatory frameworks for all stakeholders globally.

These are essential factors that indicate a domino effect that will be felt not only in North America but also across Europe, Asia and the emerging markets. The key factors influencing investment and productivity will be AI and digital transformation. Businesses will take a "slow-hire and slow-fire" approach, but technology will continue to define and shape the nature of jobs and the global labour market.

Even though unemployment will be at its lowest in advanced economies, they will still experience a talent shortage and underemployment. There will be an increase in flexible work, wellbeing and inclusion, but also in automation and training gaps.

Leaders will need to build wellbeing into productivity, as new work patterns and a focus on employee skilling emerge. There will be an increase in international student migration spread across hubs in Europe, Asia and the Middle East. Gig-like options will increase within the organisation and demand for global freelance and remote talent pools will rise.

Employees must distinguish and add unique human value to a human-AI workflow, and leaders must prioritise governance, AI data and cyber resilience. Students must also future-proof their abilities with micro-credentials and stackable learning. Opportunity zones surrounding AI-enabled services must be identified and planned for by entrepreneurs. The key to employee survival will be constant upskilling.

Turbulent conditions are expected to persist through 2027, driven by extreme weather events, societal polarisation, geopolitical confrontations and misinformation. Corporations must prepare for supply chain recalibration and prioritise climate transition strategies. Educational institutions must explore expanding their programme portfolios to include new career pathways in climate technology, resilience planning and sustainable finance. Global growth could experience a meaningful boost, holding steady despite major policy shifts. This is due to new trade deals, multiple exemptions, private-sector agility in rerouting supply chains, emerging AI investments and fiscal stimulus in major economies. Several 2026 research reports warn that the Central Bank's independence faces growing political pressures, potentially undermining its credibility in fighting inflation. Significant productivity gains from AI, faster de-escalation and resolution of trade tensions are key upside factors that could meaningfully boost the global economy.

The International Monetary Fund (IMF) projects that 2026 will be a year of cautious optimism and resilient growth with persistent risks. The year will be a turning point where generative and multimodal AI will begin delivering tangible productivity gains. World reports and analyses concur that key growth engines like clean energy, infrastructure and technology-enabled services will drive global growth in 2026. In the long run, economies must invest in innovation, productivity and multilateral cooperation, while empowering enterprises through horizontal policies such as education, infrastructure and smart regulations. There is a high probability that 2026 will be a ‘slow growth’ and ‘high impact’ year.