We raise our global growth forecasts
Global growth rises to 3.0% amid resilient trade and flat inflation; delayed policy effects and fiscal pressures shape 2026, while central banks calibrate easing and labor markets adjust to tech‑driven shifts.
Pleasantly surprised
This entire year, we’ve maintained an upside‑to‑consensus view of global growth, and it turns out it hasn’t been optimistic enough. This round, we’ve made a further “mark to market” upgrade to global growth (up two-tenths to 3.0%) thanks to slightly better trajectories in the United States, China, and the eurozone. Next year’s forecast remains unchanged at 2.9%, as the anticipated acceleration in the US is offset by moderation in China.
There is a fundamental lesson here. It is often said that we tend to overestimate technology’s impact in the short term and underestimate it in the long term. The same is often true for geopolitical and macroeconomic shifts. The April 2 “liberation day” tariffs triggered acute fears of an immediate collapse in trade, a spike in inflation, and a global recession. In the event, global trade volumes continued to rise, inflation largely flatlined, and global growth remained near trend. That is not to say that nothing is happening; rather, it is taking a long time for the full impact to be visible. This is why we sometimes describe 2026 as the year of delayed policy impact—the adjustments are ongoing. We have not seen the full reorientation of trade, nor the full pass‑through to inflation, nor much visible lift to growth from the German debt brake deal. Moreover, not all policy shocks are behind us. Mexico’s recent announcement of tariffs on Chinese imports is a case in point. Trade frictions continue to percolate. Even so, the global economy has proven incredibly resilient and tariff pass‑through contained. This allows the Fed to deliver a few more cuts next year, allows the BoE to offer more meaningful easing, and allows most other central banks to stand by and assess the process without needing to intervene.
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