BIS Annual Economic Report 2026: from resilience to robustness, strengthening the foundations of policyThe BIS annual report: the world economy held up. Next, build strong foundations
On June 28, 2026 the BIS published its Annual Economic Report. Over the past year investment in AI ecosystems helped global growth withstand the blow from major tariff hikes, but geopolitical headwinds and rising fiscal and financial fragilities remain. The BIS calls for stronger foundations: fiscal sustainability, an unambiguous commitment to price stability and congruent prudential policies across the financial system.
- (1) TariffsEffective tariff rates were lower than expected, with trade diversion and firms absorbing costs
- (2) AI investmentCapital expenditure on AI surged and lifted US investment
- (3) Stock pricesAI optimism lifted valuations and kept financial conditions favourable
Key points
- It names three factors behind solid growth in 2025: effective tariff rates lower than initially anticipated, trade diversion and firms absorbing costs through lower margins; a surge in capital expenditure on AI infrastructure; and AI optimism lifting stock valuations and sustaining favourable financial conditions
- Chapter I, “Progress and peril”: the global economy weathered shocks thanks to progress in AI, but pressure points are mounting around persistent inflation, the sustainability of AI-related investment, financial vulnerabilities and weakening fiscal positions; price stability, financial stability and fiscal sustainability should be prioritised
- Chapter II: the interplay of near record-high public debt with the growing role of non-banks in sovereign debt markets creates a fiscal-financial stability nexus that amplifies and accelerates the transmission of market stress
- Chapter III: as digital innovation transforms finance, it asks how to preserve trust in money, looking beyond stablecoins
What to do in practice
- Compare the points on interest rates, prices and fiscal sustainability with the assumptions in your borrowing and investment plans
- Check the details in the body of each chapter (Chapters I to III)
The BIS, an international organisation where the world’s central banks work together, has published its annual report. Over the past year the world economy held up even with higher tariffs, and investment in AI was a big support. But with public debt and weak spots in finance growing, it urges strengthening the “foundations”, such as stable prices and sound public finances.
- ○Applies: Make public finances sustainable over the long run
- ○Applies: Make an unambiguous commitment to stable prices
- ○Applies: Align the rules across the financial system to keep it safe
- ×Does not apply: Higher tariffs stopped world growth
Points
- In 2025, world growth held up even though tariffs rose
- Investment in AI and rising stock prices supported the economy
- From now on, it is important to strengthen the “foundations”: stable prices, public finances and the financial system
What the words mean
- BIS
- the Bank for International Settlements, an international organisation where central banks cooperate
- stablecoin
- digital money designed to keep a stable value
The past year saw investment in artificial intelligence (AI) ecosystems help global growth to withstand the blow from major tariff hikes. Yet geopolitical headwinds and rising fiscal and financial fragilities remain. Reinforcing the foundations of effective macroeconomic and financial policies is increasingly critical.
- Bank for International Settlements (BIS): BIS Annual Economic Report 2026 (June 28, 2026)
- Bank for International Settlements (BIS): BIS Annual Economic Report 2026, Chapter I: Progress and peril
Economic news presents published statistics and outlooks. It is not investment solicitation or trading advice. Figures are as of publication and may be revised.
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