Report · International body
Annual Economic Report 2026
The BIS calls for moving from resilience to robustness: strengthening fiscal, price and prudential foundations in the face of a new link between public debt and financial stability.
- Organization
- Bank for International Settlements (BIS)
- Document date
- 28 June 2026
- Type
- Report
- Language
- English
- Scope
- International
- Length
- 133 pages
What it contains
The Bank for International Settlements’ (BIS) Annual Economic Report 2026, published on 28 June 2026 at its annual general meeting, opens with a review of the year: growth held up in 2025 despite tariffs, thanks to effective tariff rates lower than expected, trade diversion and firms’ willingness to absorb costs, and to a wave of optimism about artificial intelligence (AI) that boosted infrastructure investment and stock valuations. That resilience was tested in early 2026, when the closure of the Strait of Hormuz caused a major shock to energy supply that pushed inflation well above central banks’ targets again.
The report identifies four pressure points: inflation has risen and may spread through supply chains; optimism about AI may not last if capital spending proves unsustainable or overinvestment reverses; financial vulnerabilities persist, with compressed risk premia, stretched valuations, opaque financing of AI activities, high leverage in core markets and a growing footprint of private credit; and fiscal pressures are mounting, with higher interest payments as a share of GDP. Chapter II (high public debt and shifting financial markets) describes a new fiscal-financial stability nexus, in which leveraged hedge funds increasingly intermediate government debt and market liquidity can vanish abruptly.
As implications, the report asks monetary policy to stay vigilant in anchoring inflation expectations and to assess the effect of AI on growth, financial stability and inflation; fiscal policy for sustainable paths and temporary, targeted measures against the energy shock; and financial stability policy for “congruent” regulation of the risks of non-bank financial institutions (excessive leverage, liquidity mismatches and vulnerabilities in sovereign debt markets), with frameworks adapted to AI-driven risks, including cyber threats. Chapter III deals with trust in money and with innovation beyond stablecoins.
Why it matters for risk management
It gives macro-financial context for stress scenarios and risk appetite: inflation and interest rates, sovereign risk, market liquidity and private credit. It is a global analysis and not a report on the Dominican Republic, so its conclusions need to be translated to each institution’s own exposure.
Summary prepared by the Dominican Republic Risk Management Club from a reading of the original document, with the source verified on 12 October 2026. It does not replace reading the official text and is not advice.
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