Global GDP growth rebounded to 3.3 percent in 2022 following the pandemic, but projections indicate a slowdown to around 2.8 percent by 2026 due to diminishing fiscal stimulus, tighter monetary policies, and ongoing geopolitical tensions.

According to Aon's Credit Solutions Market Insights report, the world economy is expected to experience slower and regionally divergent growth, influenced by trade protectionism and uneven technological advancements.

Elevated trade barriers are anticipated to disrupt global supply chains, increase inflation, and limit economic activity, raising concerns about retaliatory tariffs and policy uncertainty that complicate investment and trade flows.

Rising tariff risks are identified as significant macroeconomic challenges, with US effective import tariff rates projected to peak at 25.5 percent under extreme scenarios, indicating a shift towards long-term protectionism.

The US economy, after a period of strength, is expected to slow down due to the impacts of higher interest rates and declining consumer demand.

In contrast, the Asia-Pacific region, particularly India and China, is projected to remain the global growth engine, while the Eurozone and the UK face challenges from energy disruptions and structural issues.

While inflationary pressures may decrease, long-term challenges such as aging populations and global instability will continue to influence the economy.

In light of these simultaneous threats, Aon advises businesses to adapt strategies, hedge against volatility, and prepare for a more complex economic environment in the coming decade.

The professional services, ICT, and finance sectors are expected to benefit most from AI advancements, though improvements will vary across regions, with Southern and Eastern Europe and MENA anticipated to see modest gains.

The report highlights that AI could positively impact global GDP, with the US economy potentially experiencing a 7 percent increase by 2033 through widespread AI adoption, while Western Europe could see a 3.7 percent uplift, and the global average may reach 3 percent.

The Middle East, which faced a sharp economic slowdown in 2023 due to oil price volatility, is forecasted to gradually recover.