The global economy is caught between two forces: geopolitical shocks and the AI dividend. Which one will reach the turning point first?

The global economy is stuck between two forces: geopolitical shocks and the AI dividend—who will reach the turning point first?

The global economy is not moving along a clear cyclical curve; rather, it is being pulled at the same time by two opposing forces: on one side are geopolitical frictions, risks to energy corridors, and supply-chain disruptions; on the other is the medium- to long-term productivity promise brought by the spread of artificial intelligence. The latest World Economic Forum Chief Economists Outlook shows that the mainstream view has clearly turned cautious: nearly 90% of surveyed economists expect global growth to weaken over the next year, 94% expect inflation to rise, but concerns about a global recession have still not taken over entirely.

The significance of these judgments lies not in whether they accurately predict next quarter’s data, but in what they reveal about the changing structure of global economic risk. Over the past decade or so, markets have been more worried about insufficient demand, excessively low interest rates, and weak growth; today, however, the source of shocks is shifting from financial conditions to energy security, from trade frictions to geopolitical blockades, and from “not enough growth” to “growth being interrupted.”

The most symbolic change is that the risk in the Strait of Hormuz has returned to the center of global economic pricing. For the global energy market, this is not merely an oil transport issue, but a classic systemic node: once a key shipping lane is obstructed, the impact will cascade through energy prices, food costs, shipping insurance premiums, inventory cycles, and corporate expectations. Chief economists believe this disruption is now more damaging than last year’s tariff disputes. If such an interruption persists, its impact could even approach the scale of the shock seen during the pandemic. The key point here is not the simplistic conclusion that “oil prices will rise,” but that business models built in the era of globalization on low-friction logistics, just-in-time supply, and cross-border specialization are exposing greater vulnerability.

This vulnerability is not evenly distributed. The survey shows that the Middle East and North Africa are being hit most directly. Just a few months ago, the region was often seen as a relatively bright growth area; now, 88% of respondents expect growth there to be weak or very weak. This rapid reversal shows that regional economic performance is increasingly dependent on the geopolitical environment, not just fiscal policy or the resilience of domestic demand. For economies that rely on energy, shipping, and regional stability, the risk premium has already become part of the growth equation.

More notably, this round of shocks is not just being “transmitted externally” to emerging markets. Stagflationary pressure in Europe is intensifying, with slowing growth and rising inflation appearing at the same time; inflation expectations in sub-Saharan Africa have risen to the highest level among the surveyed regions. For these economies, the problem is often not something a single monetary-policy tool can solve, but rather the simultaneous rise in the cost of imported energy, food, and dollar financing. In other words, global shocks are once again magnifying inequality through the most fragile price chains.By contrast, the United States and India are still seen as relatively resilient, for very practical reasons: domestic demand, investment, and a relatively intact internal circulation buffer. This contrast reflects a longer-term trend — in a more fragmented global economy, countries with large domestic markets, deep capital pools, and policy space are gaining stronger shock resistance. Globalization has not disappeared, but the way its gains are distributed is changing. Economies that once relied on external markets and global division of labor are now more likely to stall when hit by external shocks; by contrast, countries with strong domestic demand and industrial clustering capabilities are more likely to become destinations for the reallocation of capital and supply chains.

Markets are also repricing this uncertainty. Chief economists broadly expect volatility in private debt markets to rise over the next year, and public debt and equity markets to become more unstable as well. This is especially worth watching because the real risk lies not only in geopolitics itself, but in the fragile structure of the global financial system when high debt, high interest rates, and high uncertainty converge. In recent years, the expansion of private credit had been seen as an important source of financing beyond the traditional banking system; but once the macro environment deteriorates, these seemingly dispersed risks may flow back into the financial system in a more hidden way.

At the same time, artificial intelligence remains one of the few sources of certainty in the global economy. Ninety-two percent of surveyed chief economists expect AI adoption to continue expanding over the next year. This suggests that, despite rising geopolitical risks, companies and governments are not slowing their investment in technology. The issue is that market expectations for productivity gains from AI are becoming more cautious. In other words, AI’s “adoption speed” is still accelerating, but its “output realization speed” is no longer seen as immediate.

This change has structural significance. AI is undergoing a transition from the narrative stage to the organizational stage: it is no longer just a growth story for tech companies, but is beginning to enter traditional sectors such as healthcare, engineering, construction, utilities, and care services. Yet these are precisely the sectors with complex processes, strict regulation, fragmented data, and strong organizational inertia. They are unlikely to release productivity gains as quickly as the software industry. In other words, AI will ultimately reshape the economic structure, but the pace of that change is likely to be slower than capital markets originally imagined.

It is worth noting that information technology and education are the only two sectors where expectations have not changed significantly. This is unsurprising. The former is the most direct beneficiary of AI, while the latter may become a key setting for knowledge dissemination and skills retraining. If the first stage of AI is compute power, models, and capital expenditure, then the second stage is more like organizational restructuring, job reshaping, and skills redistribution. Its impact on the labor market will not unfold evenly, but will instead redivide along lines of city, industry, and income level.This also explains why the global economy today increasingly looks less like a simple cyclical problem and more like a system transition period. Energy security matters more than ever, shipping routes are more sensitive than trade agreements, debt markets are more fragile than monetary policy, and AI has greater long-term narrative appeal than traditional stimulus policies. The problem with the old model is that it assumed global division of labor, low inflation, and stable financial conditions could all persist at once; the new reality requires countries to rebuild sources of growth in a more friction-filled international environment.

For policymakers, this means two things. First, in the short term, they need to prepare for inflation and supply shocks, rather than focusing only on demand stimulus. Second, in the medium to long term, they must strengthen their economies’ resilience to disruption, including energy diversification, critical infrastructure resilience, supply-chain regionalization, and sound debt structures. For businesses, the old mindset of treating the global market as a homogeneous space is failing; regionalized positioning, inventory strategies, and financing security all need to be redesigned.

From a broader historical perspective, the world economy is moving toward a kind of “technological optimism under high uncertainty.” People still believe that AI and innovation can create growth, but it is also becoming increasingly clear that technology cannot automatically offset the fractures caused by geopolitics. In the next few years, what will truly determine the quality of global growth may not be whether any single technology succeeds, but whether countries can preserve the basic continuity of supply chains, energy flows, and capital flows in a more fragmented world.

This is precisely the most critical paradox facing the global economy today: on the one hand, the technological revolution is still incubating a new productivity cycle; on the other hand, geopolitics is continuously raising the friction costs of the global economy. Whoever can resolve this contradiction first is more likely to take the initiative in the next round of global economic reordering.

SEO Description The global economic outlook is being pulled by two forces: geopolitics and AI. The latest chief economists’ survey shows weaker growth expectations and rising inflation risks, while AI diffusion continues to accelerate. This article examines the structural changes behind this round of global economic repricing, focusing on energy security, supply chains, regional divergence, and productivity transformation.

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