• 13% forecasts global recession amid rising geopolitical risks
•92% anticipates increased AI adoption
Emmanuel Addeh in Abuja
The global economy has entered a period of heightened uncertainty, with an overwhelming 94 per cent of the world’s leading economists expecting inflation to rise over the next 12 months, according to the May 2026 ‘Chief Economists’ Outlook’ released by the World Economic Forum (WEF).
In the same vein, it explained that nearly nine out of every 10 of the chief economists foresee weaker economic growth, as geopolitical tensions and supply chain disruptions continue to reverberate across international markets.
The report warned that the escalating conflict in the Middle East and the closure of the Strait of Hormuz have fundamentally altered the trajectory of the global economy.
According to the report, 89 per cent of surveyed chief economists expect global growth to weaken over the coming year, with more than one-fifth predicting a significant slowdown. The findings represent a sharp reversal from the cautious optimism that characterised global economic sentiment at the beginning of 2026.
The report highlighted the closure of the Strait of Hormuz, a critical artery for global energy shipments, as a major economic shock whose impact is already being felt across energy, food, fertiliser and transportation markets worldwide.
Economists surveyed by the WEF rated the disruption as potentially more severe than the tariff-related turmoil experienced in 2025 and warned that prolonged closure could eventually rival the economic fallout witnessed during the COVID-19 pandemic.
Inflation emerged as the dominant concern among respondents, with the majority agreeing that global price pressures would intensify over the next year as higher energy and food costs feed into broader consumer prices. The survey indicated that rising fuel prices, supply chain bottlenecks and heightened financial market volatility are collectively driving inflation expectations higher across virtually every region of the world.
For Nigeria and other African economies, the findings carry significant implications. The report showed that 67 per cent of chief economists expect high or very high inflation in Sub-Saharan Africa over the next 12 months, reflecting concerns about imported inflation, higher food prices and increased energy costs.
Despite the deteriorating outlook, economists stopped short of predicting a full-scale global recession. Only 13 per cent of respondents believe the world economy is likely to enter recession within the next year, while 58 per cent expressly disagreed with that proposition.
Instead, the consensus pointed to slower growth, elevated inflation and increased market volatility rather than outright economic contraction.
The report also revealed mounting concerns over financial markets. About 79 per cent of chief economists expect increased volatility in private debt markets over the next year, while 74 per cent foresee similar turbulence in public debt markets. Additionally, 68 per cent anticipate greater instability in global equity markets as investors navigate a more uncertain geopolitical environment.
Besides, regional outlooks varied considerably. India emerged as the strongest growth story globally, with 52 per cent of respondents expecting strong or very strong economic expansion over the next 12 months.
The United States was also viewed relatively favourably, with 74 per cent predicting moderate growth supported by artificial intelligence investments, consumer spending and government expenditure. China’s prospects improved modestly, with 77 per cent expecting moderate or stronger growth, compared to 71 per cent in the previous survey.
Europe, however, faces a far more challenging outlook. The survey found that 65 per cent of economists expect weak or very weak growth across the continent, while half foresee high inflation as rising energy costs increase the risk of stagflation—a combination of sluggish growth and elevated prices.
The Middle East and North Africa region recorded the weakest outlook among all surveyed regions, with 88 per cent of respondents expecting weak or very weak growth amid the continuing conflict and worsening food security concerns.
One of the more positive findings in the report related to artificial intelligence. Although optimism has moderated since the beginning of the year, 92 per cent of chief economists still expect AI adoption to increase significantly over the next 12 months. However, many now believe that productivity gains from AI will take longer to materialise across industries than previously anticipated.
The survey also showed a shifting map of global investment attractiveness. The United States ranked as the most attractive destination for multinational corporations, with 65 per cent of respondents placing it among their top three investment locations. India followed at 56 per cent, while Southeast Asia attracted support from 50 per cent of respondents, reflecting growing investor interest in markets perceived as resilient and strategically positioned within global supply chains.
Commenting on the findings, WEF Managing Director, Saadia Zahidi, said the global economic outlook had worsened dramatically in recent months.
“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. The longer the disruption lasts, the heavier the long-term cost for those who can least afford it,” said Zahidi.
