Economic trends expected in 2026: Less cooperation, more distrust?

The global economy changed in the space of one year in 2025 due to the United States (US) tariffs and other geopolitical issues that made countries less likely to cooperate and more likely to view each other with suspicion. The picture that Sanisha Packirisamy, chief economist and Tshiamo Masike, economist at Momentum Investments, paint in their economic outlook for January will not ensure that you sleep better at night, but it should also not keep you up. They say companies are adjusting to a more fragmented and uncertain world.

“In the US, the pre-order shield has vanished, with tariffs now driving unit cost increases for many. Small businesses are most exposed, while larger firms absorb costs with their scale.” Meanwhile, European companies are confronting high energy costs, carbon border taxes and supply chain fragility, forcing them to adopt efficiency-driven strategies, they point out. “In China, anti-involution policies and high-tech manufacturing are providing selective growth amid a property slump.

“South African businesses are meanwhile prioritising de-risking, and South to South trade is expected to offset structural constraints.” Looking ahead, Packirisamy and Masike expect to see these trends in 2026: The architecture of the post-war liberal order is loosening piece by piece, even if the shifts are quieter than the headlines suggest. “A growing number of governments are steered by populist or hard-right formations and their consolidation in office is placing steady strain on institutions once considered untouchable, such as courts, public broadcasters and central banks.” They say that, on the surface, the world can appear calmer, with brief ceasefires and negotiated pauses in the war offering the impression of stability as conflicts drag on. However, Packirisamy and Masike warn that the underlying landscape is more fragile. “As long as standing institutional safeguards are weakened or repurposed for geopolitical bargaining, the system becomes more vulnerable to shocks, leaving global politics more brittle than the momentary lulls in tension might imply.”