WEF economists forecast global stability as fiscal support wanes

The global economy is entering a period of stabilisation, though fiscal buffers that protected nations from shocks since 2020 are set to diminish, according to the World Economic Forum’s (WEF) Chief Economists’ Outlook released on Tuesday, 22 September. Data from the survey shows 56% of chief economists now expect the global outlook to remain stable or improve. This represents a significant shift in sentiment from May, when 89% of respondents predicted weakening conditions. However, confidence remains fragile, with 97% of economists identifying geopolitical conflict as the primary source of uncertainty for the coming year. Fiscal Constraints and Resilience Shifts While 69% of economists credited government fiscal support as the lead driver of economic resilience since 2020, only 28% believe such support will continue over the next 12 months. Attilio Di Battista, Head of Economic Growth and Transformation at the WEF, noted that government fiscal capacity is likely to be more constrained moving forward, requiring a shift toward private-sector drivers. Future economic stability is expected to rely on flexible supply chains and technological innovation. The United States and China are currently viewed by the WEF cohort as the nations best positioned to withstand external shocks. The survey also highlights that 58% of economists anticipate asset-price corrections in the near term. AI Adoption and Infrastructure Costs Artificial Intelligence (AI) is projected to be a primary…