The Resilience Tax

Why the global economy is still growing while households feel poorer, and how energy security, climate adaptation, artificial intelligence and geopolitical risk are rewriting the economics of prosperity.

By Prof. Dr. Nikolaos Antonakakis
Professor of Economics, Director of the School of Business, University of Nicosia, UNIC Athens
30 July 2026

The world economy is sending a deeply confusing message. Output is still expanding, companies are investing, employment remains comparatively resilient and the artificial intelligence boom is supporting entire segments of global demand. Yet households continue to experience the economy through a very different lens: expensive food, volatile energy bills, high mortgage costs, fragile public services and the persistent sense that economic progress is no longer translating into personal security.

This is not simply a communications failure, nor is it adequately explained by the familiar claim that official statistics fail to capture lived experience. The contradiction is real. The global economy is growing, but it is also devoting a larger share of its resources to protecting itself against disruption. That protection is necessary, but costly.

For three decades, the dominant economic model rewarded efficiency above almost everything else. Firms concentrated production where it was cheapest, reduced inventories, outsourced non-core activities and built supply chains around the assumption that energy, transport, finance and geopolitical stability would remain reliably available. The result was a powerful disinflationary machine. Consumers benefited from cheaper goods, companies benefited from lower costs and central banks operated in a world where many supply shocks appeared temporary.

That world has disappeared. The pandemic exposed the fragility of concentrated production. Russia's invasion of Ukraine revealed Europe's energy dependence. Renewed conflict in the Middle East has again placed the Strait of Hormuz and the Red Sea at the centre of the global economic outlook. Extreme heat, drought and wildfires are turning climate risk into a direct constraint on food production, labour productivity, transport and public infrastructure. At the same time, the race to build artificial intelligence capacity is generating extraordinary demand for semiconductors, data centres, electricity grids, engineers, electricians and capital.

A new economic charge

The additional cost of managing these vulnerabilities can be understood as a resilience tax. It is not a formal levy collected by the state. It is the combined economic cost of making production, energy, trade, defence, digital systems and public infrastructure less vulnerable to shocks.

It appears in duplicated supply chains, larger inventories, strategic energy reserves, defence budgets, insurance premiums, grid upgrades, water infrastructure, cyber security, climate adaptation and industrial subsidies. It also appears in higher interest rates when central banks fear that repeated supply shocks will become embedded in wages, services and inflation expectations.

The latest global numbers capture this uncomfortable combination. The International Monetary Fund projects global growth of 3.0 per cent in 2026 and 3.4 per cent in 2027. That is not a recessionary outlook. Yet the IMF also expects global headline inflation to rise from 4.1 per cent in 2025 to 4.7 per cent in 2026 before easing to 3.9 per cent in 2027. Growth is continuing, but the global disinflation process has stalled.

Energy has returned to the centre of macroeconomics

Energy is the clearest transmission channel. On 29 July, Brent crude briefly touched about 91 dollars a barrel as attacks resumed across the Middle East. The importance of the price move lies not only in the oil market itself, but in the breadth of its effects. Energy enters freight, aviation, fertiliser, food processing, plastics, construction and almost every internationally traded product.

There is a further strategic dimension. The Strait of Hormuz normally carries roughly one fifth of global oil supply, while disruption in the Bab al-Mandab and the Red Sea removes an important alternative route. When both routes become insecure, markets do not merely price the barrels that are currently missing. They price the risk that tomorrow's flows may be interrupted, that inventories may prove inadequate and that governments may respond with export controls or emergency subsidies.

This is why an energy shock can persist even when physical supply has not collapsed. The risk premium enters prices immediately. It then affects inflation expectations, wage bargaining, fiscal policy and the cost of capital.

Central banks face the wrong kind of inflation

The Federal Reserve's latest decision illustrates the dilemma. It kept its policy rate at 3.5 to 3.75 per cent, but three policymakers voted for an increase. The disagreement is important because it reflects uncertainty about the nature of current inflation. Is it a sequence of temporary shocks that monetary policy should look through, or evidence that repeated shocks are keeping inflation above target for long enough to change behaviour?

Interest rates cannot produce oil, reopen a shipping lane, create rainfall or build an electricity grid. They also cannot quickly expand the supply of semiconductors or skilled construction workers. Yet central banks cannot ignore these constraints. When energy, tariffs, labour shortages and infrastructure bottlenecks spill into broader prices, the distinction between temporary and persistent inflation becomes increasingly difficult to maintain.

The European Central Bank faces the same problem. Euro area inflation eased to 2.8 per cent in June, but the ECB has warned that the full effect of the energy shock has yet to pass through. Monetary policy is therefore being asked to contain the second-round effects of shocks whose original causes lie largely outside the monetary system.

Artificial intelligence is both cure and pressure point

The AI investment boom is usually presented as a productivity story, and ultimately it may be one. But in the short run it is also a capacity story. Data centres need land, chips, cooling systems, water, electricity and grid connections. They require large construction projects and scarce technical skills. The resulting demand is supporting growth, but it is also bidding up the price of constrained inputs.

This creates a timing problem. The productivity gains from AI may arrive gradually and unevenly. The capital expenditure, electricity demand and financing costs arrive immediately. Some economies and companies will capture the gains, while others will mainly experience congestion in power networks, higher infrastructure costs and greater competition for skilled workers.

The recent divergence in equity markets reflects that tension. US and Asian technology shares came under pressure amid concerns about the scale and profitability of AI spending, while the FTSE 100, with its heavier exposure to energy, mining, defence and traditional industry, reached a record high. Investors were not abandoning growth. They were shifting towards the parts of the economy that benefit from scarcity, security spending and physical infrastructure.

Climate risk is now an inflation and productivity risk

Europe's extreme summer provides another part of the same story. Drought, wildfire and exceptional heat are no longer peripheral environmental developments. They are macroeconomic events. They damage crops, raise insurance losses, reduce labour productivity, strain electricity and water systems, disrupt tourism and force governments to spend more on emergency response and adaptation.

The economic effect is cumulative. A single heatwave may look temporary. Repeated heatwaves alter investment decisions, food supply chains, working hours, construction standards and the value of exposed assets. What appears in one year as an exceptional event becomes, over time, a permanent increase in the cost structure of the economy.

Why households still feel poorer

The distributional consequences explain much of the public frustration. The sectors benefiting from the new environment are often capital intensive: energy, defence, semiconductors, data centres, infrastructure and selected industrial firms. Their investment raises GDP, corporate revenue and asset values. But households encounter the transition through mortgage payments, fuel, food, insurance, taxes and reduced access to overstretched public services.

In other words, aggregate resilience can improve while individual economic security deteriorates. An economy may become better prepared for disruption and still leave many citizens with less disposable income. This is the central political economy problem of the current period.

Governments have often responded with broad subsidies and price caps. Such measures may be justified during acute emergencies, but they cannot be the permanent answer. Universal subsidies weaken the incentive to conserve scarce resources, burden public finances and frequently transfer income to households that do not need support.

From resilience tax to resilience dividend

The better objective is to turn unavoidable resilience expenditure into productive capacity. Public investment should be judged against three questions. Does it remove a genuine bottleneck? Does it attract private investment rather than displace it? Does it reduce the economy's exposure to future shocks?

Electricity networks, interconnectors, storage, water systems, ports, digital infrastructure, workforce skills and climate-proof public assets are likely to meet those tests. Permanent protection for inefficient firms, politically selected projects and subsidies without measurable outcomes will not.

For Greece, the issue is especially important. The country is an energy importer, a major shipping nation and a tourism economy exposed to heat, water scarcity and geopolitical instability. Yet it also possesses significant renewable potential, maritime expertise, strategic ports and a geographical position that can support energy and logistics networks across the Eastern Mediterranean and southeastern Europe.

The Greek policy objective should therefore go beyond compensating consumers after each external shock. It should reduce the frequency and intensity with which those shocks enter domestic prices and production. Energy storage, stronger interconnections, water management, climate-resilient tourism, modern ports, agricultural technology and carefully planned digital infrastructure belong to the same economic security agenda.

The world economy is not returning to the low-cost, low-inflation structure that preceded the pandemic. Security, energy, climate adaptation, technology and strategic autonomy will command a permanently larger share of investment. The key question is no longer only how rapidly an economy grows. It is how much that economy must spend simply to remain functional, and whether that spending creates lasting productive value.

That is why the distinction between a resilience tax and a resilience dividend matters. The cost is already being paid. The quality of policy will determine whether societies eventually receive the return.