Chief Economists’ Outlook January 2026: reassuring resilience and a ‘good’ bubble?

The World Economic Forum's Chief Economist's Outlook is assessed with Christian Keller, Head of Economics Research at Barclays Investment Bank. The discussion centers on the tension between negative fundamental developments like trade fragmentation and geopolitical tensions, and the positive reactions of financial markets, particularly the AI investment boom. Economists' revised forecasts upwards despite initial tariff concerns are examined, attributing the resilience to delayed implementation, exemptions, and front-running by companies. The conversation explores AI's impact on employment, distinguishing between substitution and complement effects, and addresses concerns about a potential AI bubble and its macroeconomic implications. The cost of living, public debt management through inflation, and shifts in government spending priorities, especially regarding defense versus environmental protection, are also analyzed.