Scenario Eco - Erosion of resilience factors

Scenario Eco – Societe Generale
Michala Marcussen, Societe Generale group Chief Economist
March 2026
Erosion of resilience factors

Could the global economy recover quickly from the current energy crisis?
The announcement last spring of President Trump’s Liberation Tariffs sent tremors through global financial markets. When the detail finally emerged, the actual tariffs implemented proved notably lower than those threatened.
At the same time, favourable tailwinds emerged from AI investment, lower energy prices and pockets of fiscal easing. Together, these forces supported resilience, boosting financial market confidence and asset prices, which then in turn fed back to further real economy resilience.
This prompts the question: could the global economy once again demonstrate such resilience if a much hoped for peace in the Middle East were to emerge. Our view is that a replay of global economic resilience is much less likely in 2026.
How does the present economic shock differ from that of 2025?
Threatening tariffs generates an uncertainty shock but does not entail any direct upfront costs, apart from building inventory ahead of threatened tariff implementation. The present conflict not only comes with very real human suffering but also comes with immediate and significant upfront costs to the real economy, be it higher energy costs, the very real risk of supply shortages, risks to fertilisers needed for food production, damage to critical infrastructure or lost business activity, that will be hard to recover. Even once a ceasefire is reached, rebuilding confidence will take time.
A further point to note is that the global economic resilience observed in 2025 was, even prior to the present conflict in the Middle East, showing signs of fading. Job creation had already ground to a near standstill in the United States, and concerns were emerging as to which companies lose out to AI. Tremors in private credit markets added to the headwinds, with credit-quality concerns driving redemptions and squeezes on liquidity.
Market hopes for further rate cuts from major central banks have, moreover, now been scaled back due to higher energy prices.
Is there any room for upside surprise in 2026?
Delivering upside surprises requires that confidence is returned. Good policy can be a tremendous support for confidence, and here in Europe numerous wining mesures have been well identified in numerous reports, and not least the Draghi Report on Competitiveness. Key now is to deliver!