Global Economy Faces 'Everything Changed' Reality

The International Monetary Fund projects the global economy will grow by a resilient 3.3% in 2026, crediting surging technology investments and adaptable private sectors for offsetting trade policy headwinds. The World Bank, however, offers a more cautious forecast of 2.6% growth, warning that expansion is too concentrated in advanced economies to significantly reduce extreme poverty. A key source of this uncertainty is the fragmentation of the global economic order, with geopolitical risk management and "friend-shoring" arrangements beginning to supplant cost efficiency in supply chain design. The share of G20 imports covered by tariffs has seen the largest increase in the history of WTO trade monitoring, a tool of what the World Economic Forum calls geoeconomic confrontation. This has triggered tangible shifts in global trade, with British manufacturers, for example, pivoting away from the US towards Asian and European markets in response to tariffs throughout 2025. In a broader structural change, global trade in services grew by approximately 9% in 2025, significantly outpacing the trade of goods. Artificial intelligence has become a primary engine of growth, particularly in the United States, with worldwide AI spending expected to surpass $2 trillion. Some analysts estimate that AI-related capital expenditure cushioned the U.S. economy against other pressures, with investment in data centers, chips, and power grids reminiscent of the 1990s telecom boom. However, the reliance on AI carries risks, including a potential investment bubble if companies fail to demonstrate clear productivity gains and profitability beyond the initial infrastructure build-out. Economists at Goldman Sachs have calculated that massive AI investment contributed "basically zero" to U.S. economic growth in 2025, suggesting its true impact is still debated. Despite supply chain resilience becoming a boardroom priority, many companies remain underprepared for shocks. A 2025 survey revealed that over 60% of organizations rated their own resilience capabilities as "Basic or Ad Hoc" in critical areas like logistics continuity and digital infrastructure. The focus of supply chain managers has shifted accordingly, with a 2025 survey of 1,000 senior executives showing geopolitical factors are now a top concern. Cybersecurity risks have also surged in importance, rising from 5% of executives citing it as a top issue in 2023 to 16% in 2025.