Chief Economists' Outlook: May 2026
At a glance
- May 2026 outlook significantly more pessimistic than January edition, driven by Middle East conflict and Strait of Hormuz closure.
- US and India expected to maintain moderate-to-strong growth despite renewed inflation; China's outlook improved modestly.
- Europe faces weaker growth, energy shocks and rising stagflation risks; South-East Asia resilient but vulnerable to import costs.
- Multinational companies recalibrating investment and supply chains; US, India and South-East Asia identified as most attractive business locations.
- Artificial intelligence remains source of optimism, though productivity gains now expected to arrive more slowly and unevenly.
What the report covers
The World Economic Forum's May 2026 Chief Economists' Outlook examines global economic conditions through consultations and survey responses from the Forum's Chief Economists Community. The report assesses growth prospects, regional divergence, and corporate investment strategies across major economies amid supply-chain disruption, energy shocks, and geopolitical tensions. It provides comparative analysis against the January 2026 edition and forecasts conditions through 2026.
Key findings
The May 2026 outlook presents a markedly more pessimistic assessment than its January predecessor. According to the report, growth expectations have deteriorated significantly as the escalation of Middle East conflict and closure of the Strait of Hormuz have disrupted global supply chains. Rising energy and food prices, combined with heightened financial volatility, reinforce inflationary pressures and erode business and consumer confidence.
Regional economic prospects have diverged substantially. The report finds the US and India are expected to maintain moderate-to-strong growth, though both face renewed inflation pressures. China's outlook has improved modestly. Europe confronts the most challenging conditions, with weaker growth, energy shocks and rising stagflation risks. South-East Asia remains comparatively resilient but faces vulnerability to higher energy and food import costs.
Multinational corporations are restructuring operations in response to heightened geopolitical and economic uncertainty. The report identifies the US, India and South-East Asia as the most attractive locations for business investment and supply-chain recalibration. This reflects companies' attempts to manage risk in an increasingly fragmented global economic environment.
Artificial intelligence continues to provide optimism for longer-term productivity gains, though expectations have been revised downward. The report notes that productivity improvements from AI are now expected to materialise more slowly and unevenly across sectors and regions than previously anticipated.
Key numbers
| Metric | Value |
|---|---|
| Outlook tone shift | More pessimistic than January 2026 edition |
| US growth trajectory | Moderate to strong |
| India growth trajectory | Moderate to strong |
| China growth outlook | Modest improvement |
| Most attractive business locations | US, India, South-East Asia |
Figures as published in the source; forecasts and survey results are labelled as such in the note.
Why it matters
DMOs & destinations
Regional divergence in growth expectations signals uneven recovery in international visitor flows. Europe's stagflation risks may depress outbound travel demand, while US and India's resilience could sustain source markets. DMOs must adjust forecasting and marketing strategies by geographic source market and monitor energy cost impacts on accessibility.
Hotels & hospitality
Supply-chain disruption and energy price volatility directly affect operating costs and capital investment cycles. Divergent regional growth forecasts require differentiated pricing and yield strategies. Stagflation risks in Europe may compress margins; operators should review hedging strategies and prioritise markets with stronger demand resilience and lower inflation pressure.
Travel tech & distribution
Multinational recalibration towards US, India and South-East Asia suggests shifting distribution priorities and booking patterns. Travel platforms should monitor demand elasticity in weakening markets (Europe) and prepare for volatility in booking windows and payment behaviour. AI productivity gains offer optimisation opportunities but will materialise unevenly; prioritise near-term efficiency gains.
Methodology and limits
The report draws on consultations and survey responses from the World Economic Forum's Chief Economists Community. The methodology combines expert insights from leading economists with survey-based input to assess global growth prospects and regional economic divergence. This brief is based on the publicly available summary only; the full report methodology, sample size, and detailed statistical appendices were not accessible in the source text provided.
Official source
The report is © World Economic Forum. This brief is an original editorial summary by TourismIntel — it quotes only figures published in the source and never reproduces the document.
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