By Ginika Igboke
The Swiss alpine town of Davos opened the World Economic Forum’s (WEF) 56th annual meeting on Jan. 19, welcoming a steady influx of political and business leaders for a week of closed-door discussions and high-profile panels amid a shifting global economy and intensifying geopolitical strains.
Organizers said the meeting, which runs through Jan. 23 under the theme “A Spirit of Dialogue,” is among the most senior in the forum’s history. The WEF expects a record turnout of about 400 top political figures, including nearly 65 heads of state and government and six leaders from the Group of Seven, alongside roughly 850 CEOs and board chairs and close to 100 technology pioneers and unicorn founders.
U.S. President Donald Trump is expected to participate, with the forum noting that the U.S. delegation will be the largest ever sent to Davos. WEF President and CEO Børge Brende said Trump will be joined by special envoy Steve Witkoff, Trump’s son-in-law Jared Kushner, and a large bipartisan delegation from the U.S. Congress.
Organizers have structured this year’s agenda around five core challenges: cooperating in a contested world, unlocking new sources of growth, investing in people, deploying innovation responsibly, and building prosperity within planetary boundaries. The forum has positioned the meeting as a platform for dialogue at a time of growing fragmentation, rising complexity, and rapid technological change.
“Dialogue is not a luxury, it is a necessity,” Brende said, stressing the need for engagement across governments and industries despite sharpening global rivalries. Mirek Dušek, the forum’s managing director for programming, said discussions are taking place at a pivotal moment, with many leaders debating whether the world is in transition or has already entered a new geopolitical era.
Trump’s anticipated appearance is expected to underscore those tensions. The president has consistently emphasized U.S. national interests in trade and security, a stance that has complicated relations with European allies even as his administration maintains that transatlantic ties remain strategically important. Earlier this month, Trump said he planned to address housing and affordability issues during his remarks in Davos, citing inflation and rising costs as barriers to homeownership for many Americans.
During a remote appearance at the forum in 2025, Trump urged OPEC to lower oil prices, called for interest rate cuts, and warned of tariffs on companies manufacturing outside the United States. Since returning to office in January 2025, he has pressed for tougher trade negotiations and repeatedly accused the European Union of unfair trade practices, particularly criticizing value-added taxes and regulatory barriers.
On security, Trump has continued to push European allies to increase defense spending, arguing that the United States shoulders a disproportionate share of NATO’s burden. NATO members agreed last year to significantly raise military spending targets, addressing a long-standing Trump priority. His renewed calls for U.S. control of Greenland, which he describes as strategically vital to counter Russian and Chinese influence, have added to European unease.
The administration has also criticized free speech conditions in Europe, a debate that intensified last year when U.S. Vice President JD Vance accused European leaders of censorship and weak immigration enforcement. Despite these frictions, Trump has hosted multiple European leaders at the White House to discuss Ukraine and NATO cooperation, including French President Emmanuel Macron, German Chancellor Friedrich Merz, British Prime Minister Keir Starmer, and European Commission President Ursula von der Leyen. He has also praised Italian Prime Minister Giorgia Meloni and Hungarian Prime Minister Viktor Orbán for what he calls strong leadership.
As the forum convenes, the economic backdrop reflects resilience alongside emerging risks. On Jan. 19, the International Monetary Fund slightly raised its global growth forecasts, saying the world economy has adapted better than expected to disruptions from U.S. tariffs that peaked in 2025 and have eased in recent months. The IMF cited technology investment, fiscal and monetary support, and private-sector adaptability as factors offsetting trade policy shifts.
The fund now projects global growth of 3.3 percent in both 2025 and 2026, with U.S. growth in 2026 revised up to 2.4 percent, supported by fiscal policy and lower interest rates. IMF Chief Economist Pierre-Olivier Gourinchas said businesses have adjusted to higher U.S. tariffs by rerouting supply chains, while trade agreements and shifts in Chinese exports have softened the impact.
A major driver of the improved outlook, IMF officials said, is a surge in information technology investment, particularly in artificial intelligence infrastructure. IT investment as a share of U.S. output has reached its highest level since 2001, boosting business activity and generating spillover effects, especially for Asia’s technology exporters.
However, Gourinchas warned that the AI boom carries risks. If high expectations for productivity and profits fail to materialize, a correction in inflated market valuations could tighten financial conditions and slow growth. He said a moderate pullback in AI-related stock valuations could reduce global growth by 0.4 percentage points, with broader consequences if investment and employment in technology sectors decline sharply.
These risks come amid heightened geopolitical uncertainty, limited fiscal space in many countries, and growing use of export controls on critical materials such as rare earths—factors that could amplify any market correction and turn it into a wider economic slowdown.
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