Global economy faces uncertainty in 2026 as AI reshapes jobs worldwide by 2030

LONDON Jan 25: Artificial intelligence (AI) is poised to dramatically transform global labour markets by the end of the decade, with outcomes ranging from major productivity gains to large-scale job displacement, according to a World Economic Forum (WEF) white paper released this month.

Titled Four Futures for Jobs in the New Economy: AI and Talent in 2030, the report outlines four possible scenarios illustrating how advances in AI and varying levels of workforce preparedness could reshape employment, value chains, and economic growth. The analysis draws on insights from the Forum’s Chief Strategy Officers Community and global foresight experts.

Survey data cited in the paper reveal significant uncertainty among business leaders. About 54 per cent of executives worldwide expect AI to eliminate existing jobs, while only 24 per cent believe it will generate new roles. Nearly 45 per cent anticipate higher profit margins from AI adoption, but just 12 per cent expect wages to rise, indicating that productivity gains may not be evenly shared with workers.

The Forum emphasised that technology alone will not determine the future of work.

“The future of workplaces and value chains will not be defined by the technologies alone. Human capital strategies and investments prioritised today will determine how well societies and individual businesses can adapt to — and lead in — the new economy,” the report stated.

The four scenarios range from Supercharged Progress, where rapid AI breakthroughs drive innovation and create new occupations, to The Age of Displacement, in which automation outpaces reskilling efforts, resulting in higher unemployment and social instability. Two additional scenarios envision more uneven outcomes: the Co-Pilot Economy, where AI mainly augments human labour, and Stalled Progress, characterised by skills shortages, limited productivity gains, and widening inequality.

Across all scenarios, the report stressed that foresight should be treated as a strategic planning tool rather than a forecasting exercise.

The white paper forms part of the World Economic Forum’s Scenarios for the Global Economy Dialogue Series, which aims to help decision-makers navigate complex global transitions through structured scenario analysis and cross-industry dialogue.

As AI shifts rapidly from experimentation to widespread integration, the Forum concluded that decisions taken by businesses and policymakers in the coming years will be critical in determining whether AI becomes a driver of shared prosperity or a source of deeper economic and social divides.

Meanwhile, the global economy is expected to face a difficult year in 2026, according to the World Economic Forum’s latest Chief Economists’ Outlook, also released this month. Although confidence has improved slightly compared with last year, more than half of leading economists believe global economic conditions will deteriorate in the months ahead.

The survey found that 53 per cent of chief economists expect the global economy to slow, while only 19 per cent anticipate stronger growth.

“With 53 per cent of chief economists expecting global economic conditions to weaken, 28 per cent expecting no change and 19 per cent expecting a stronger economy, the prospects for the global economy tilt towards the negative in the year ahead, albeit with improved sentiment compared to last year’s outlook,” the report said.

High debt levels, inflated asset prices, and persistent geopolitical tensions continue to weigh on the outlook. Trade disputes and shifting geopolitical alliances are also reshaping global investment patterns and supply chains.

Despite these risks, financial markets — particularly in the United States — have remained strong, buoyed by a surge in AI-related stocks. Economists, however, are divided on whether these elevated valuations are sustainable. Some warn of potential asset bubbles and sharp market corrections, while others argue that today’s leading technology firms are more profitable and better capitalised than those involved in past market crashes. At the same time, traditional safe-haven assets such as gold have gained popularity as investors seek protection from uncertainty.

Debt has emerged as a growing concern for governments and businesses worldwide. Years of heavy borrowing have pushed both public and private debt to elevated levels, forcing policymakers to make difficult trade-offs. Spending on defence, digital infrastructure, and energy is expected to increase, while funding for education, social protection, and environmental programmes may come under pressure.

Global trade is also adapting to a more fragmented economic landscape. Countries are increasingly relying on regional and bilateral trade agreements to secure access to critical resources and technologies. As a result, some regions are likely to benefit, while others may struggle amid rising protectionism and policy uncertainty.

Artificial intelligence remains both a powerful opportunity and a major source of disruption. While economists expect AI to lift productivity over time, its benefits are unlikely to be evenly distributed. Adoption is advancing more rapidly in advanced economies and large corporations, while smaller firms and developing regions risk falling behind. The long-term impact on employment remains uncertain.