The World Economic Forum’s 2026 outlook presents a compelling analysis of a global environment defined by increasing multipolarity and declining multilateral cooperation. Multiple centres of power are becoming more assertive across economic, political, and technological domains. At the same time, the institutions and frameworks that traditionally coordinated international action are weakening. This tension between a more diffused distribution of power and the erosion of cooperative mechanisms has created a world characterised by instability, uncertainty, and fragmented decision making. The WEF’s assessment highlights how this dynamic influences global growth prospects, risk patterns, and policy choices.
A noteworthy finding from the WEF’s Chief Economists’ Outlook is the prevailing expectation that global economic conditions will deteriorate in 2026. According to surveyed chief economists, 53% foresee a weakening of the global environment, while only 19% predict improvement.
This outlook is shaped by the compounding effects of geopolitical conflict, disrupted trade relationships, and rising debt levels. These pressures are intensified by the reduced capacity of multilateral institutions to coordinate policy or mitigate systemic risks.
Geoeconomic confrontation: The defining feature of 2026
One of the clearest illustrations of multipolarity without meaningful multilateralism is the dramatic rise in geoeconomic confrontation. The Global Risks Report 2026 identifies geoeconomic confrontation as the top global risk for the year. Major powers increasingly employ tariffs, sanctions, export controls, and industrial policy measures to advance national interests. Such instruments have become central to global competition, supplanting earlier frameworks that encouraged open and predictable economic interaction. This trend reflects a shift towards power based decision making, where strategic advantage outweighs the principles of collective governance.
The consequences for the global economy are far reaching. Trade flows are being redirected according to geopolitical alignment rather than economic efficiency. Supply chains are reconstructed to prioritise resilience and security. Cross border investment decisions are now more heavily shaped by political calculations. Analysts cited by the WEF note that these shifts are already disrupting regulatory environments and reducing the predictability essential for global commerce and long term planning.
Weakening multilateralism and policy fragmentation
As global power competition intensifies, traditional multilateral structures have struggled to maintain influence. The WEF’s outlook explains that heightened geopolitical tensions continue to reshape trade and investment patterns in ways that undermine cooperative governance. Instead of a shared approach to global problem solving, national strategies are increasingly inward looking and risk averse.
The decline in multilateral coordination carries tangible economic implications. High public debt levels limit fiscal flexibility in many countries, reducing the capacity for collective stimulus during periods of slowdown. At the same time, persistent policy uncertainty affects business confidence and reduces investment appetite. These constraints create a feedback loop in which limited cooperation exacerbates instability, and instability further erodes the incentives for cooperative action.
Technology, AI, and fragmented innovation ecosystems
Technological competition, particularly in artificial intelligence, is another important dimension of this emerging multipolar order. The WEF identifies AI adoption as both an opportunity and a significant source of risk. While technologically advanced economies accelerate innovation, many developing economies face constraints that limit their participation in these new growth sectors. This divergence risks widening global inequality and creating fragmented technological ecosystems.
The Global Risks Report 2026 notes that concerns about AI governance failures and cybersecurity vulnerabilities are rising, and that competitive approaches to innovation are taking precedence over coordinated frameworks. These risks underscore how technological progress, when pursued in isolation, can deepen fragmentation.
Societal and environmental pressures intensify the need for coordination
The WEF also highlights escalating risks related to societal polarisation, misinformation, and environmental instability. These challenges transcend national borders and require coordinated responses. Yet the decline in multilateralism means that many countries are approaching these threats independently rather than collectively. This fragmentation limits the global capacity to manage shared risks effectively.
