Global Economics Mid Year Outlook

Global growth remains constructive but faces caution due to an energy supply shock, with US AI capex providing a firm floor as disinflation stalls temporarily until 2027.

Key Takeaways

• 1.Global growth is supported by US AI-driven capex and high-end consumer spending, despite an energy supply shock that slows growth modestly in 2026 before a 2027 recovery.
• 2.Global disinflation has been interrupted by the energy shock in 2026 but is expected to resume in 2027 as effects fade.
• 3.Monetary policy is diverging among DM central banks in 2026; the Fed is on hold while the ECB hikes, before converging toward neutral in 2027.

Table of Contents

• Our Global Views in Charts
• Key Forecasts
• Growth
• Tech Diffusion: AI Drives a Strong US Capex Cycle
• Inflation
• Future of Energy: Oil Price Volatility
• Monetary and Fiscal Policy
• Societal Shifts – AI Productivity and Labor Markets
• Global Trade
• Multipolar World: Trade and Reshoring
• Alternative Scenarios
• Baseline Forecasts
• Country Snapshots
• Global Strategy Forecasts

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