Good morning from the Swiss Alpine resort of Davos, where the final day of the prestigious World Economic Forum is now well underway. After a week dominated by intense discussions on the shifting world order, escalating geopolitical tensions, potential tariff wars, and the rapid advancement of artificial intelligence, the spotlight today turns decisively toward the health and future trajectory of the global economy.
Key Figures to Address Economic Outlook
Today's agenda features heavyweight economic leaders who will deliver their critical assessments. European Central Bank President Christine Lagarde, International Monetary Fund Managing Director Kristalina Georgieva, and World Trade Organization Director-General Ngozi Okonjo-Iweala are all scheduled to present their views during a pivotal session on the Global Economic Outlook. This collective perspective arrives at a crucial moment, as the overall economic forecast has notably darkened over the course of the week.
Warnings and Anxieties Dominate Discussions
The forum has been punctuated by sobering warnings from global leaders. The heads of Germany and Canada have expressed significant concerns regarding the rising influence of great powers and the potential destabilisation this could cause. Furthermore, a pervasive anxiety regarding artificial intelligence's impact on employment has been a recurring theme, with many delegates questioning whether AI will trigger a widespread unemployment crisis.
Speaking earlier in the week, ECB President Christine Lagarde issued a stark warning about the erosion of international trust. She specifically pointed to the escalating threats from former US President Donald Trump. In an interview with CNN, conducted prior to Trump's latest tariff pronouncements, Lagarde stated: "I think the trust is undermined. When you keep repeating the same pattern of undermining the rule of law, undermining the contracts, undermining what has been agreed between parties, then parties begin questioning, is that for real? Is that going to change again? And that's when uncertainty looms large."
Lagarde also emphasised that Europe must urgently evaluate its own economic strengths and vulnerabilities. This introspection is deemed essential, she argued, "just in case the normal relationship is not restored" on the global stage, highlighting a preparation for a more fragmented economic landscape.
A Contrasting Narrative on Tariffs and Growth
Interestingly, a slightly more optimistic counter-narrative has also emerged. Paul Gruenwald, the global chief economist at S&P Global Ratings, observed that discussions about tariffs and broader macroeconomic risks have been somewhat less prevalent at this year's Davos gathering compared to previous editions. He attributes this shift to the performance of the global economy in 2025.
"I put this down to the fact that 2025 turned out to be a decent year for the global economy," Gruenwald reported. "Part of this was tariff climbdowns combined with resilient consumer spending and labour markets. And part of this was the offsetting demand from the AI and data centre investment boom and its spillovers through the trade channel."
Winding Down in the Alps
The final day's proceedings are, in reality, more of a half-day schedule, with official events due to conclude by lunchtime. There is a palpable sense that many delegates have already departed the mountain resort, perhaps eager to return to their respective capitals to either confront or, as some might argue, exacerbate the world's multitude of problems. The remaining agenda includes focused sessions on next-generation social movements, the geopolitical risk outlook for 2026, and a philosophical discussion on the very meaning of politics, before the main economic outlook session brings the forum to a close.
