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2026 Predictions: How Will the Economy Adapt in the Year Ahead?

January 8, 2026 Leave a comment DRI Admin

The DRI International Future Vision Committee has released its 11th Annual Predictions Report, looking ahead to 2026 and its impact on the resilience community. Download the complete report free from the DRI Library, and read on for how the U.S. economy may create larger challenges.

Prediction 1: The U.S. economy will face difficult challenges as policies adopted in 2025 start to have consequences.

To forecast U.S. business activity for the next 12 months is challenging. While it appears that the U.S. has had a soft landing from its inflationary period, the full impact of tariffs has not yet been felt. There is a legal challenge to be heard by the Supreme Court to determine the legality of the use of emergency tariffs controlled by the U.S. president. If the court rules in the government’s favor and tariffs remain in effect, the inflationary effects may reduce consumer spending and lead to a sluggish economy.

Several other factors may influence economic performance. The reduction of the U.S. National Institute of Health’s (NIH) budget by 40% and the National Science Foundation’s (NSF) budget by 55% may reduce innovation, which drives industrial and pharmaceutical growth. Furthermore, the proposed cessation of funding to any project involving non- U.S. labs may affect the viability of certain projects and cause tension between national science organizations1.

Increased unemployment also will be felt in the public sector as government implements cost reduction policies. Additionally, the loss of tax credits for the purchase of EVs has already reduced demand in the U.S., and a reduction in future sales is expected.

Furthermore, when full-year figures are announced, 2025 is expected to see a $5.7 billion drop in total inbound travel spending (including an 18% fall in visitor numbers from Canada), with Europeans now opting to holiday within Europe or the Middle East, and many Asian tourists choosing Europe. Canada was a key contributor to the fall in travel spending as travel boycotts to the U.S. continue due to tariff disputes. Canadians are now more likely to holiday domestically2. There is no sign of this trend bucking in 2026.

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