According to the latest edition of the IMF World Economic Outlook, global growth is expected to hold steady at 3.3% in 2026 and 3.2% in 2027—a modest upward revision from the October 2025 forecast. Behind this apparent stability, a set of opposing forces are at play. Headwinds from shifting trade policies, and the Trump administration …
Continue reading “Wars and the AI bubble – the downside risk scenarios to the global outlook 2026”
Imagine monitoring and assessing a doubling of the public education budget in the next five years but with a number of caveats: This, very unlikely, scenario for education is happening across Europe in another key government function: defence policy. Following a decades-long post-Cold War focus on peace dividends and asymmetric threats, the international landscape has …
Continue reading “Assessing the military in times of re-armament”
The global economy remains in recovery mode from the burst of high inflation of 2022 and monetary tightening that followed and is still under threat of rising geopolitical tensions and armed conflicts. For most regions and countries, GDP growth rates will remain far below the pre-Covid 2010-2019 averages. Much of the slowdown is due to …
Continue reading “The outlook and downside risk scenarios for 2024 (Updated)”
The downside risk scenarios identified in the latest flagship reports by international organisations (IMF, OECD, WB, UN, EC) and central banks (BIS, ECB, US Federal reserve) are recapped in the following flow chart – including where they intersect most. Overall, the most cited risk scenarios: (i) a monetary tightening that gets out of control because …
Continue reading “Downside risk scenarios by international organisations”
Geopolitical risks feature unusually high in economic outlooks by international organisations. The challenge for economists is to predict and “quantify” the economic consequences of geopolitical tensions and armed conflicts. Broad trends can of course be drawn with respect to trade and investment flows (retrenchment) and to the efficiency of multilateralism (weakening and polarisation). From an …
