Introduction
Good morning from Davos, where the final day of the World Economic Forum is underway.
After a week dominated by issues such as the world order, geopolitical tensions, tariffs and artificial intelligence, the health of the global economy will be in focus today.
ECB president Christine Lagarde, IMF head Kristalina Georgieva and WTO director-general Ngozi Okonjo-Iweala will give their views on the Global Economic Outlook.
It’s an outlook that has darkened this week, with warnings from the leaders of Germany and Canada about the rise of great powers, and anxiety over whether AI will create an unemployment crisis.
Speaking here earlier this week, Lagarde warned that President Trump’s escalating threats have undermined trust.
She told CNN, before Trump TACO’d out and dropped his 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.”
She also warned Europe needs to look at its economic strength, and weaknesses., just in case the normal relationship is not restored.
S&P Global Ratings’ global chief economist, Paul Gruenwald, reports that talk about tariffs, and macro-economics has been less prevalent in Davos this year.
“I put this down to the fact that 2025 turned out to be a decent year for the global economy. Part of this was tariff climbdowns combined with resilient consumer spending and labor markets.
And part of this was the offsetting demand from the Al and data center investment boom and its spillovers through the trade channel.”
Actually, it’s more of a half-day, with events due to wrap up by lunchtime. And it feels like many delegates have already fled Davos, perhaps to fight or inflame (YMMV) the world’s problems.
The agenda
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8.45am Davos / 7.45am GMT: Session on Next Generation Social Movements
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9am Davos / 8.45am GMT: Session on Geopolitical Risks Outlook for 2026
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10.15am Davos / 9.15am GMT: Session on the Meaning of Politics
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11am Davos / 10am GMT: Session on the Global Economic Outlook
Key events
Photos: it’s over
The WEF annual meeting has now wrapped up. Top level delegates are leaving in chauffeur-driven cars, while others schlep to the railway station with their luggage (that’s us).
Kristalina Georgieva also told WEF that the IMF’s research into AI has found that in advanced economies, one in 10 jobs is already enhanced.
People in these jobs are paid better, she explains, meaning they spend more money in the local economy. That can lead to an increase in demand for restaurant jobs, for example.
But there are also two very serious problems.
The first one is that tasks that are eliminated are usually what entry level jobs present so young people searching for jobs find it harder to get to a good placement.
And two, which Georgieva is very worried about, is the squeeze on jobs that are not touched by AI.
They will be paid less, so the “middle class, inevitably, is going to be affected” she adds.
IMF chief sees AI ‘tsunami’ heading towards jobs market
Artificial intelligence is going to be a “tsunami hitting the labour market”, the head of the International Monetary Fund has told Davos.
Kristalina Georgieva has told the World Economic Forum that IMF research suggests 60% of jobs in advanced economies will be affected by AI, either “enhanced, eliminated or transformed” in the coming years, and 40% globally.
People whose jobs are enhanced are paid more, and spend more money in their local economy.
But, the jobs eliminated are often entry-level, hurting young people.
Georgieva says her appeal is:
Wake up, AI is for real, and it is transforming our world faster than we are getting ahead of it.
Lagarde: Need to be careful about wealth distribution
The head of the European Central Bank then sounds the alarm over wealth inequality.
Christine Lagarde tells Davos that “we have to be careful about the distribution of wealth” and the “disparity that is getting deeper and bigger’.
If we don’t pay attention to that we are heading for real touble.
She’s not alone; earlier this week, nearly 400 millionaires and billionaires from 24 countries called for higher taxes on the super-rich.
ECB chief Christine Lagarde warns that the artificial intelligence boom could falter if the world becomes less co-operative.
Lagarde says we’ve heard a lot of European bashing in the last few days – and she says “thank you to the bashers” as it has shown Europe must be more focused.
She adds that “we are dependent on each other”, poiting out that AI is capital intensive, energy intensive and data intensive.
It will prospers if there is plenty of all that, Lagarde expains, but if we do not work cooperatively and “define the new rules of the game” there will be less capital and less data.
“We are in a bind, lets face it.”
And in what she calls an “emotional” aside, Lagarde says she has huge trust and affection for the American people.
I know that at the end of the day, the deeply-rooted values will prevail.
Ngozi Okonjo-Iweala, director-general of the World Trade Organization (WTO), predicts that the disruption caused in recent years by tariffs and trade tensions will not be fully reversed.
Asked whether president Trump’s aggressive approach around tariffs and allies have created a ‘forever situation’ that will outlast his time in the White House, Okonjo-Iweala says:
I don’t think we’ll go back to where we were.
She adds that business and policy leaders need to plan for a world with “built-in uncertainties in it”.
If I was running a country I’d be trying to strengten myself and my region, and building resilience.
Kristalina Georgieva, managing director of the International Monetary Fund, then tells Davos that we are now in a more ‘shock-prone’ world.
This is leading to surprises within geopolitics, technology, and climate.
Asking Davos delegates who’s watched the Wizard Of Oz, Georgieva jokes:
We are not in Kansas any more.
Lagarde is also critical about some of the numbers for economic growth being banded around in Davos this week, saying they are usually nominal numbers – the real growth figures (adjusted for inflation) are lower.
It’s important to speak the truth, she says, adding:
“We have to be honest about the numbers we use”.
Lagarde plays down fears of rupture in world order
Christine Lagarde, head of the ECB, is telling Davos that she is “not exactly on the same page as Mark”, when asked about prime minister Carney’s speech this week warning of a “rupture” in the world order.
Lagarde explains that policymakers need to look at Plan B, or even “Plans B”, but she is not sure we should be talking about rupture.
She adds that countries around the world depend on each other, with very strong links – in a world of supply-and-demand, suppliers are sometimes in a position of strength, but so are demanders.
Lagarde adds that “all directions have to be explored,” but the duty of central bankers and economists is to distinguish the signals from the noise.
Watch: Global economic outlook panel
It’s time for the final big panel session from the WEF annual meeting – on the Global Economic Outlook.
On the panel we have:
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Albert Bourla, chairman and CEO, Pfizer
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Ngozi Okonjo-Iweala, director-general, World Trade Organization (WTO)
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Christine Lagarde, president, European Central Bank
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Kristalina Georgieva, managing director, International Monetary Fund (IMF)
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Mohammed Al-Jadaan, Minister of Finance of Saudi Arabia
It’s being moderated by Andrew R. Sorkin of the New York Times.
Hopes that space collaboration will continue despite geopolitical tensions
The weakening world order has been a key issue at WEF’s annual meeting this week, but could space be an area where the big powers, and the rest, can still co-operate?
Max Haot, CEO of Vast Space, is here in Davos, and is optimistic that heightened geopolitical tensions will not undermine the space industry.
Vast are aiming to launch the world’s first commercial space station, called Haven 1, in the first quarter of next year.
Haot tells me that the whole history of human space flight is based on countries joining together and working together – citing the cooperation between the West and Russia in space over the decades.
He says:
Even during the Cold War, we did things with Russia at the time. We connected the Soyuz capsule of Russia with the Apollo capsule, and later on, we worked with Mir and the space shuttle.
Haot hopes that leaders will embrace the symbolism of human spaceflight and keep collaborating.
We also hope, obviously, the collaboration starts on every level. Everything tells us historically, that there is a really good chance that the symbolism of human spaceflight, the desire to work together, the higher goal, can survive some more short-term tensions in other areas.
Vast, who are funded by cryptocurrency billionaire Jed McCaleb, is one of several companies competing for the contract to build the successor to the International Space Station (ISS), which is scheduled to be decommissioned by the end of 2030.
Last November, it launched its in-orbit test bed for space station technologies, called Haven Demo.
Vast’s goal is first to succesfully launch Haven-1, a standalone, crewed station, and later to create Haven-2, a multi-module station that could replace the ISS.
Haot believes at least two bidders will win a contract to build a successor to the ISS.
Haven-1 moved into its integration phase earlier this week, for pressurized fluid systems, such as thermal control, life support, and propulsion system tubes, to be installed and tested.
That’ll be followed by avionics, guidance, navigation and control systems, and air revitalization hardware, and eventually “crew habitation and interior closeouts, exterior micrometeoroid and orbital debris (MMOD) shielding, thermal radiator installation, and solar array integration”, making it ready for deployment in low-earth orbit.
Attempts to resolve Donald Trump’s fixation on Greenland has distracted Europe from the urgent task of pushing Russia back in Ukraine, Jane Harman adds.
Davos is now hearing about the geopolitical risks of the year ahead.
Jane Harman, chair of the bipartisan US Commission on the National Defense Strategy, warns that America is leaving a “huge vacuum” around the world, which China is moving into.
She cites the risk of a future unipolar world, made up of command economies controlled by China.
Harman, a former congresswoman, also warns that Congress is not “pulling its weight” within its role of controlling spending and setting budgets.
One of the many news stories out of Davos this week was the ‘framework of a future deal’ announced by Donald Trump over Greenland, after meeting Nato chief Mark Rutte on Wednesday.
But it’s still not clear what was hammered out.
French foreign minister Jean-Noel Barrot has told BFM TV this morning that France has no details at this stage on a deal reached Rutte and Trump.
Gold: next stop $5,000?
The precious metals market is giving its own verdict on the stability of the global economy.
Gold has hit yet another record high today, at $4,967 an ounce, pushed up by geopolitical risks, concerns about the independence of America’s central bank, and anxiety that high debt levels may lead to currency debasement.
Kathleen Brooks, research director at XTB, explains:
The weak dollar is helping to push gold to a fresh record high. The gold price is higher by more than 7% this week and is up $20 so far on Friday. There is no stopping the gold price right now, as the $5,000 per ounce level beckons.
Investors may be willing to buy stocks in this environment, but geopolitical risk and an unconventional US President is keeping demand for the yellow metal alive as we move through January.
Introduction
Good morning from Davos, where the final day of the World Economic Forum is underway.
After a week dominated by issues such as the world order, geopolitical tensions, tariffs and artificial intelligence, the health of the global economy will be in focus today.
ECB president Christine Lagarde, IMF head Kristalina Georgieva and WTO director-general Ngozi Okonjo-Iweala will give their views on the Global Economic Outlook.
It’s an outlook that has darkened this week, with warnings from the leaders of Germany and Canada about the rise of great powers, and anxiety over whether AI will create an unemployment crisis.
Speaking here earlier this week, Lagarde warned that President Trump’s escalating threats have undermined trust.
She told CNN, before Trump TACO’d out and dropped his 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.”
She also warned Europe needs to look at its economic strength, and weaknesses., just in case the normal relationship is not restored.
S&P Global Ratings’ global chief economist, Paul Gruenwald, reports that talk about tariffs, and macro-economics has been less prevalent in Davos this year.
“I put this down to the fact that 2025 turned out to be a decent year for the global economy. Part of this was tariff climbdowns combined with resilient consumer spending and labor markets.
And part of this was the offsetting demand from the Al and data center investment boom and its spillovers through the trade channel.”
Actually, it’s more of a half-day, with events due to wrap up by lunchtime. And it feels like many delegates have already fled Davos, perhaps to fight or inflame (YMMV) the world’s problems.
The agenda
-
8.45am Davos / 7.45am GMT: Session on Next Generation Social Movements
-
9am Davos / 8.45am GMT: Session on Geopolitical Risks Outlook for 2026
-
10.15am Davos / 9.15am GMT: Session on the Meaning of Politics
-
11am Davos / 10am GMT: Session on the Global Economic Outlook
