Insight
Global economic outlook Q3 2026: approaching a tipping point
*Please note that this report only includes an Excel data file if this is indicated in "What's included" below
Report summary
Despite the US-Iran war and its associated energy shock, the global economy continues to hold firm. Global GDP growth is forecast at 2.5% in 2026, an upgrade from 2.3% in our previous update, with a further rebound to 3.0% expected in 2027. Three factors underpin this resilience: strategic energy reserves, retreating oil prices as alternative export routes are maximised, and an ongoing AI investment boom bolstering growth across the US, China and Asia. However, risks remain elevated. The collapse of the US-Iran Memorandum of Understanding has delayed prospects for a resolution, and an extended disruption to transit through the Strait of Hormuz could yet tip the global economy into recession. We are in a new era of elevated geopolitical risk that is unlikely to subside.
Table of contents
- Executive summary
- US-Iran war drags but global economy holds firm
- Middle East: uneven economic shock
- India feeling the pressure
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AI boom
- US riding the wave
- Boost for Asia’s exporters
- China sluggish
- Is Europe missing out?
- Industrial production: energy headwinds stronger than AI tailwinds
- Navigating macro megatrends
Tables and charts
This report includes the following images and tables:
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GDP forecast and recession scenarioGeopolitical risk is rising againDependency on hydrocarbon revenue
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Recessions for key oil producersIndustrial production forecastAI boom has cushioned the slowdown in US economyUS reliant on foreign supply chains for AI infrastructureDivergence of export trends among Asian economiesThe US and China AI duopolyInvestment gap between US and China
What's included
This report contains:
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