Global Forecast Update

30 October 2026 / Report

Global Economy Approaching a Fork in the Road

Trusted Insights for What’s Ahead^®

Global growth remains resilient: the world economy is forecast to expand 3.0% in 2026, with the baseline forecast projecting 3.2% growth in both 2027 and 2028.

TCB scenarios put 2027 global growth in a 3.0%–3.4% range, depending on the duration of Middle East oil and trade disruptions and the strength of the US AI-investment buildout.

Energy and trade disruption are the principal near-term business risks: Middle East conflict is keeping energy, shipping, and insurance costs elevated, feeding inflation and prolonging restrictive interest-rate conditions.

AI investment is a critical but uneven source of growth: it is helping sustain US expansion and technology-intensive Asian exporters, but its benefits remain concentrated and will not fully offset softer consumer demand elsewhere.

Interest rates will remain elevated in key mature markets: US inflation is projected to stay above target through 2027, while the Euro Area faces renewed inflation pressure despite weak industrial activity—raising financing and planning risks.

Global Economy Approaching a Fork in the Road

Trusted Insights for What’s Ahead^®

Global growth remains resilient: the world economy is forecast to expand 3.0% in 2026, with the baseline forecast projecting 3.2% growth in both 2027 and 2028.
TCB scenarios put 2027 global growth in a 3.0%–3.4% range, depending on the duration of Middle East oil and trade disruptions and the strength of the US AI-investment buildout.
Energy and trade disruption are the principal near-term business risks: Middle East conflict is keeping energy, shipping, and insurance costs elevated, feeding inflation and prolonging restrictive interest-rate conditions.
AI investment is a critical but uneven source of growth: it is helping sustain US expansion and technology-intensive Asian exporters, but its benefits remain concentrated and will not fully offset softer consumer demand elsewhere.
Interest rates will remain elevated in key mature markets: US inflation is projected to stay above target through 2027, while the Euro Area faces renewed inflation pressure despite weak industrial activity—raising financing and planning risks.

The global economy is expanding at the slowest rate since 2020. While upward revisions to national accounts data in places like the US and India resulted in upgrades to The Conference Board’s global outlook this cycle, the forecasted growth rate remains relatively soft.

Conflicting forces continue to influence economic activity across the globe. Strong investment in artificial intelligence (AI) is supporting activity in the US and several Asian economies. However, conflict in the Middle East is battering the region’s economies and cascading through global energy markets. This, in turn, is boosting inflation and interest rates worldwide – hindering both business and consumer activity. Trade has remained surprisingly resilient, but ongoing tariff volatility could re-intensify.

The Conference Board forecasts that the global economy will expand by 3.0% y/y in 2026, 3.2% y/y in 2027. This month, TCB is also introducing its initial projections for 2028, which also stands at 3.2% y/y. There are significant upside and downside risks to these projections explored further below.