Davos Final Day: Global Economy in Focus Amid Warnings

Good morning from Davos, where the final day of the World Economic Forum is now underway, wrapping up a week dominated by critical global issues.

Global Economic Outlook Takes Centre Stage

After a week filled with discussions on the world order, geopolitical tensions, tariffs, and artificial intelligence, the health of the global economy will be the primary focus today. Key figures including ECB president Christine Lagarde, IMF head Kristalina Georgieva, and WTO director-general Ngozi Okonjo-Iweala are set to share their insights on the Global Economic Outlook.

Darkening Outlook and Warnings

This outlook has notably darkened over the week, with leaders from Germany and Canada issuing warnings about the rise of great powers and expressing anxiety over whether AI could trigger an unemployment crisis. Speaking earlier in the week, Lagarde highlighted that President Trump's escalating threats have significantly undermined trust in international relations.

She told CNN, prior to Trump's latest tariff threat: "I think the trust is undermined. When you keep repeating the same pattern of undermining the rule of law, undermining the contracts, undermining what has been agreed between parties, then parties begin questioning, is that for real? Is that going to change again? And that's when uncertainty looms large." Lagarde also cautioned that Europe needs to assess its economic strengths and weaknesses in case normal relationships are not restored.

Contrasting Perspectives on Tariffs

In a contrasting view, Paul Gruenwald, global chief economist at S&P Global Ratings, noted that talk about tariffs and macro-economics has been less prevalent at Davos this year. He attributed this to 2025 turning out to be a decent year for the global economy, citing tariff climbdowns, resilient consumer spending, strong labour markets, and the offsetting demand from AI and data centre investment booms.

With events scheduled to conclude by lunchtime, it feels like many delegates have already departed Davos, perhaps to address or exacerbate the world's pressing problems elsewhere.