The global economy may seem resilient but look beneath and there’s a lot of unevenness. Growth continues, yet the benefits are increasingly out of reach for many people.
FGS Global Radar 2026 highlights a widening economic divide as one of the defining features of a rewired world. A ‘K-shaped economy’ – where some parts of the economy grow and prosper while others stagnate or decline – is emerging, with outcomes diverging sharply across income groups, sectors, and geographies, and it is reshaping public attitudes, political pressure and the operating environment for business.
Growth without widespread impact
Expert views for 2026 remain mixed. Some point to continued resilience, driven by investment in AI, defense and energy, and expect the global economy to “muddle through” despite sustained uncertainty.
Others warn that risks are building beneath the surface, from high levels of debt to inflationary pressures and the concentration of value in a small number of technology companies. A broad group of experts believe there is a greater than 50% chance of a significant market correction.
Yet across this debate, there is a clear point of agreement: growth is not translating into widespread financial improvement. Across the 27 countries polled, more people expect their financial situation to worsen over the next year than improve. In most markets, pessimism outweighs optimism, with notable exceptions such as the US, where 44% expect to be better off compared to 25% who expect to be worse off.
Cost of living pressures remain the dominant concern globally, with between 42% and 85% of respondents identifying inflation as one of the most important issues facing their country.
The rise of a K-shaped economy
Economic performance and lived experience are increasingly disconnected. Where high-income earners and technology-driven sectors continue to benefit disproportionately from growth, many middle class and lower income households grapple with stagnant wages and rising costs.
Across Europe, America, Canada and Japan, 47% of respondents believe that even when the economy grows, “the benefits will be felt only by those who are already well off.” This perception is as significant as the underlying reality, shaping how people judge economic systems and those who lead them.
Economic anxiety as a political and business constraint
Affordability is now the central lense through which economic performance is judged.
64% of people identify inflation and the cost of living as one of the most important issues facing their country. Across all markets, large majorities (80%) believe that too much of the tax burden falls on working people rather than business, and 64% support the introduction of a wealth tax.
Economic anxiety now actively shapes political priorities, regulatory pressure and consumer behavior. Correspondingly, businesses now operate in an environment of heightened scrutiny around product pricing, executive pay and shareholder returns.
A widening gap between expert logic and public expectations
As the public mood sours, this widens a gap between expert perspectives and public expectations when it comes to trade-offs and compromises.
Experts tend to see a balancing act between taxation and spending, between investment and affordability or between innovation and regulation. By contrast, the public is far less willing to accept these compromises, often expecting better leadership to deliver improved outcomes without difficult choices. 66% of the public believe that a competent government could meet voter expectations without raising taxes, highlighting the scale of this disconnect.
In this context, messages based on complexity or long-term necessity, while still resonating with experts, often fall short with the general public, making support for government intervention, and populist policies, stronger.
What this means for leadership strategy
In a K-shaped economy, growth is no longer a guarantee of legitimacy.
Affordability and perceived fairness becoming key binding constraints. Business decisions, from pricing to investment, are increasingly judged not just on performance, but on how their benefits are shared.
Economic narratives must connect with lived experience. Messages centered on long-term opportunity or innovation struggle unless they address near-term realities.
Leaders must navigate multiple economic realities simultaneously. While some stakeholders are benefiting from growth, others are experiencing stagnation, requiring more thoughtful and targeted engagement.
Above all, leaders must recognize that economic divergence is less a financial issue than one of political instability, government intervention and a long-term license to operate.
FGS Global Radar 2026
The tale of two economies is one of several critical divides explored in Radar 2026. From widening gaps between elites and the public to the fragmentation of influence and trust, these forces are reshaping the global operating environment.
Drawing on 175 in-depth interviews with senior global leaders and polling of 20,000 people across major democracies, download the full report to explore the data, expert perspectives, and strategic implications shaping the year ahead.
