Geneva: The global economy is facing a severe reality check this month. According to the latest forecasts from leading financial institutions and the World Economic Forum, global growth prospects have deteriorated sharply as escalating conflicts in the Middle East drive up energy prices and disrupt supply chains.
A recent survey of chief economists revealed that nearly 90% expect global economic growth to weaken over the next 12 months. The renewed surge in oil prices is squeezing real wages worldwide and raising input costs for businesses, reintroducing the dreaded threat of “stagflation”—a toxic mix of high inflation and stagnant economic growth.
🔴 AI Optimism Cools Down
While Artificial Intelligence (AI) was expected to be the global economy’s saving grace, optimism is beginning to cool. Although 92% of economists expect greater AI adoption this year, the actual speed of productivity gains from AI has disappointed. Experts now warn that it will take significantly longer for AI to deliver meaningful financial returns in sectors like healthcare, construction, and engineering.
DuniKa Times Takeaway: The global market is caught in a difficult balancing act. High fuel costs are forcing central banks to delay cutting interest rates, meaning borrowing money will remain expensive for both consumers and businesses globally throughout 2026.
