The World Economic Forum (WEF) says the global economy is gradually stabilising, though economic uncertainties occasioned by regional conflicts, rising living costs, and increased scrutiny of artificial intelligence investment threaten projected growth.

The WEF’s Chief Economists’ Outlook published on Tuesday said 56 per cent of chief economists surveyed between August 4 and 20, 2026, predicted a stable or stronger outlook, compared with May, when 89 per cent expected economic conditions to weaken.

However, the forum said experts are less confident about the sustainability of the improvement.

Ninety-seven per cent of respondents identified regional conflicts as a key driver of uncertainty over the next year, while 58 per cent anticipate an asset-price correction and one-quarter expect a more resilient global economy.

“Chief economists expect the global economy to stabilise, but uncertainty remains high with geopolitical volatility, potential asset-price corrections, greater scrutiny of AI investment, and persistent cost-of-living pressures,” said Attilio Di Battista, head of economic growth and transformation at the WEF.

Mr Battista added, “Government support played a critical role in navigating successive crises, but fiscal capacity is likely to be more constrained going forward. The priority now is to strengthen the foundations of resilience before the next shock arrives.”

The report said that 69 per cent of economists identified fiscal support as the greatest source of the global economy’s resilience since 2020, adding that only 28 per cent expect it to play the same role in the next year. The United States and China are considered best placed to withstand shocks.

Ninety-seven per cent of economists expect an increase in AI adoption over the next 12 months, while 79 per cent expect data centre expansion to face pushback from local communities.

Meanwhile, 61 per cent do not anticipate data centre investment to trigger an increase in job creation and “majorities expect the expansion to raise electricity (78 per cent) and water (58 per cent) prices.”

According to the report, growth prospects have strengthened across most regions, although they remain uneven, with India, Southeast Asia, Central Asia, and the U.S. receiving the strongest assessments.

“China’s outlook has weakened, with about one in three economists expecting weak growth. Europe has improved modestly but remains the weakest region, with 61 per cent expecting weak or very weak growth,” the report said.

On living costs, chief economists expect prices to rise in many regions, with 88 per cent projecting food prices to increase, 83 per cent electricity prices, and 77 per cent transport prices.

“Most surveyed economists expect real incomes to decrease or stagnate across most regions, apart from Southeast Asia and India, where over 60 per cent of respondents anticipate increases,” the report said.