The global economic outlook has worsened significantly in recent weeks, according to the latest Chief Economists' Outlook report released by the World Economic Forum (WEF) on Saturday.

Nearly 90% of the surveyed chief economists expect global growth to slow over the next 12 months. The extent of the slowdown will largely depend on how long the current geopolitical tensions persist. If disruptions ease relatively quickly, the global economy could still regain momentum. But if they continue, growth is likely to come under increasing pressure.

Inflation is also expected to rise. About 94% of the respondents said they expect global inflation to accelerate, driven mainly by the closure of the Strait of Hormuz, which has pushed up energy and food prices while disrupting supply chains.

The Middle East and North Africa are expected to bear the brunt of the economic fallout from the ongoing conflict. Elsewhere, challenges vary by region. Sub-Saharan Africa is facing rising inflation expectations and currently has the highest inflationary pressures among major regions. In Europe, sluggish growth and growing inflation concerns are increasing the risk of stagflation. Meanwhile, India and the United States are expected to remain relatively resilient, supported by strong domestic demand and investment.

Financial markets are also expected to become more volatile. Nearly 80% of the economists surveyed foresee greater turbulence in private debt markets over next year, with signs of strain already emerging in private credit. Around three-quarters expect volatility in public debt markets to increase, while 68% anticipate bigger swings in equity markets.

Despite the uncertain economic outlook, confidence in AI remains strong. Some 92% of the respondents expect AI adoption to continue expanding over next year. However, economists are becoming more cautious about how quickly AI can deliver significant productivity gains.