Growth in the New Economy Towards a Blueprint 2026

As outlined in section 1, the new economy is being shaped by a number of global trends that will impact economic growth globally. Figure 3 highlights business leaders’ expectations about how some of these trends will affect economic growth over the next 5 years.20 Most trends are expected to have very similar impacts on most countries, irrespective of income levels or regional contexts. Advances in frontier technologies and the accelerating green and energy transition stand out as broadly positive across countries and income groups. Globally, respondents in 95% and 89% of countries, respectively, foresee net positive impacts, pointing to expectations that digitalization, AI, innovation-led investment and green technologies will support productivity and new economic activity, and are expected to support domestic growth. Other trends are consistently perceived as negatively impacting growth. Rising debt burdens and societal polarization are expected to weigh on growth in 93% and 74% of countries, respectively. The growing impact of climate change is also widely identified as a constraint on growth in 81% of countries globally, and particularly in low- and middle-income economies. Demographic shifts and geoeconomic fragmentation stand out as the two factors that are expected to have the most divergent economic implications across regions and income levels, shaping increasingly differentiated growth trajectories over the next 5 years. In particular, geoeconomic fragmentation is perceived as a clearly negative drag on growth in only two-thirds of the countries, while businesses’ expectations are uncertain in one out of four countries globally. These results reflect more mixed expectations regarding the potential opportunities alongside risks that will stem from the reorganization of supply chains and trade patterns. Negative expectations are particularly pronounced in Latin America and the Caribbean and in the Middle East and Northern Africa, where 94% and 79% of countries, respectively, anticipate a negative effect on growth. On the contrary, only two out of eight countries in South- Eastern Asia (Brunei Darussalam and Singapore) expect negative economic impacts from global fragmentation, while executives in Indonesia, Lao PDR and Viet Nam expect net benefits. Expectations surrounding demographic change show the greatest regional variation. Overall, 48% of countries anticipate that demographic trends will weigh on growth, as ageing and shrinking populations reduce consumption, strain public finances and contribute to labour shortages. This concern is most evident in Europe and Eastern Asia, where about eight out of ten countries expect negative impacts. Across these two regions, Japan, South Korea and countries in Eastern Europe report the most negative impacts, while Mongolia and Norway are the only two countries where demographic dynamics are expected to boost growth. In contrast, in about half of the countries in Sub-Saharan Africa, Southern Asia and the Middle East and Northern Africa, businesses view demographic developments as growth drivers. In these regions, expanding youth cohorts entering education systems and labour markets are widely seen as a potential driver of future growth and consumption. Growth in the New Economy: Towards a Blueprint 18