Global economy faces pressure from AI bubble, debt risks
While some of the economic challenges that shaped 2025 have eased—thanks to looser monetary policies, slower inflation, and shifting trade dynamics—other threats are expected to persist into the new year.
Analyses based on reports from economic research firms indicate that inflation is projected to continue declining across many countries, reflected in adjustments to policy interest rates. Yet, unexpectedly strong demand in certain regions could rekindle inflationary pressures, meaning that while inflation may not dominate the economic narrative as it did in 2025, it remains a factor to monitor.
A particularly prominent concern for 2026 revolves around a potential “AI bubble.” Investment in artificial intelligence has surged as its economic impact becomes more evident, but experts caution that the “monetization” of AI is still uncertain. A sharp pullback in AI spending—which contributed about one percentage point to US growth in 2025 through capital expenditure and construction—could be sufficient to push the US labor market into a full-scale recession.
Although AI is expected to enhance productivity and potentially ease inflation over time, the short-term surge in AI infrastructure investment might displace other economic activity.
Projections suggest data centers could consume roughly 10% of US electricity by 2030, creating pressures on power grids and raising the possibility of outages and higher energy costs.
Additionally, growing investment demands could exacerbate supply shortages, especially as immigration regulations tighten in the US and Europe.
Debt levels also remain a critical concern. Reports indicate that global debt reached approximately $346 trillion by the third quarter of 2025, increasing by more than $26 trillion over the first nine months of the year. This total represents around 310% of the world’s Gross Domestic Product.
Rising borrowing—primarily in the public sector—has pushed both developed and emerging economies to record debt levels. In many advanced economies, high debt relative to national income raises the risk of financial crises. Meanwhile, developing nations are increasingly challenged by high interest rates, escalating borrowing costs, and negative capital flows, complicating debt repayment.
Although the US and China account for much of the debt growth, most of the surge occurred in developed markets, driven by accelerated borrowing amid policy easing from major central banks.
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