Chief Economists Outlook January 2026

strategy in advanced economies in the next five years. For emerging markets, this share drops to only 9%. Results are mixed on cuts to public spending and investment as a likely strategy. Many components of public budgets, such as defence spending and debt servicing costs, appear unlikely to decline.28 In advanced economies, responses skew somewhat towards this being unlikely, while in emerging markets, just over a third see it as a likely strategy. Responses differ starkly between the two groups when it comes to the likelihood of debt restructurings or default. Only 6% of chief economists surveyed anticipate this in advanced economies, compared to 38% who view it as unlikely and 32% who consider it highly unlikely. In emerging markets, more than half (53%) believe that this is a likely (50%) or even highly likely (3%) strategy in the next five years. Figure 7: Government spending priorities In the next five years, how will government spending in the following sectors evolve in the context of higher public debt levels, domestic political divides and international geopolitical pressures? Defence Advanced economies 3 71 26 Emerging markets 3 23 71 3 Digital infrastructure Advanced economies 3 21 68 9 Emerging markets 3 6 19 68 3 Energy Advanced economies 9 18 74 Emerging markets 10 47 43 Health Advanced economies 21 26 50 3 Emerging markets 13 58 29 Social security Advanced economies 32 24 44 Emerging markets 19 61 19 Research and innovation Advanced economies 3 12 53 29 3 Emerging markets 3 23 45 26 3 Education Advanced economies 38 53 9 Emerging markets 13 55 32 Environmental protection Advanced economies 12 47 29 12 Emerging markets 13 48 29 10 Transport Advanced economies 3 35 47 15 Emerging markets 35 58 6 Share of respondents (%)Significant decrease Decrease No change Increase Significant increase Source: Chief Economists Survey. (November 2025). Chief Economists’ Outlook January 11