Conference Presentation, Fireside Chat, Panel
Global Economic Outlook: Navigating Growth, Risk, and Opportunity | Global Conference 2026
Milken InstituteConrad Kiechel, Zanny Minton Beddoes, Kristalina Georgieva, Mohamed Kande, Ariel Szarfsztejn, Mike Wirth
- The Strait of Hormuz closure is projected to generate short, medium, and long-term consequences, with current geopolitical and technological shocks potentially being massively underestimated.
- Oil prices are predicted to exceed $150 per barrel to curb demand enough to offset 14 million barrels per day of lost supply, with a baseline expectation of prices remaining at or above $100 for most of the current year and reaching $125 by 2027.
- Physical shortages are expected to emerge within weeks or months if the strait remains closed, as commercial inventories, ships at sea, and strategic reserves face diminishing capacity to absorb the shock.
- A global economic slowdown is anticipated as demand adjusts to constrained supply, with developing economies and those lacking fiscal reserves facing the most severe pain, while Europe and Asia will feel shortages sooner than the US net exporter.
- Inflation is projected to rise 3% to 6% within 12 months due to higher fertilizer costs and supply chain impacts, with inflation risks becoming unanchored if high energy prices persist into 2027.
- Current policy measures intended to shield consumers may inadvertently increase demand during a period of shrinking supply, creating a "quadrant of vulnerability" in deep recession for nations like sub-Saharan Africa.
- Businesses face immediate input cost increases of 20% to 200% within a few months, leading to real-time expectation adjustments as most CEOs were unprepared for the duration and nature of the closure threat.
- Long-term market dynamics are expected to shift as economies improve energy efficiency over 18 months, though the crisis may also drive some nations toward coal while others accelerate renewable adoption and build new refineries to reduce reliance on choke points.
- Geopolitical risks include a shaky ceasefire following Iranian attacks and US military actions, with fears that continued military engagement will further pressure oil prices upward.
- The digital economy in Latin America is accelerating due to consumer demands for transparency, positioning financial inclusion and access to financing as critical necessities.
- The global AI landscape is shifting from generative to agentic models, with complete workflows being executed by agents, which is projected to transform work by multiplying opportunities rather than solely replacing tasks.
- Approximately 60% of jobs in advanced economies will be impacted by AI, with a predicted net positive effect on employment volume but a shift toward more low-paying service roles.
- Regional disparities in AI adoption are expected, with the US leading in productivity-driven wage growth, while developing economies may lag due to infrastructure deficits despite benefits in education and healthcare.
- Regulatory fragmentation is identified as a universal failure in advanced economies regarding AI ethics and guardrails, contrasting with Europe's slow progress on capital market union.
- Cybersecurity is anticipated to require AI-driven tools to counter AI-based attacks, driven by revelations such as "Mythos."
- Economic resilience strategies include designing businesses for instability, maintaining flexibility, and utilizing scenario planning to address a range of potential futures rather than predicting specific outcomes.
- The poorest families and countries are expected to bear the brunt of future inevitable shocks, with Pacific Islands facing specific risks due to their position at the end of long supply chains.
- Cooperation among nations is viewed as increasingly necessary for managing uncertainty, with rising attendance at international finance meetings indicating a collective understanding of shared vulnerabilities.