Macroeconomic Outlook Report: Global (Q1 2026 Update)

The Q1 2026 outlook is slightly more optimistic than its Q4 2025 view, raising the projected pace of world economic growth in 2026 by 0.11 percentage points from 2.58% to 2.69%. The revision reflects easing price pressures and an expectation that borrowing costs will remain broadly steady. It also points to continued momentum from investment linked to artificial intelligence, which is supporting the technology sector and corporate profitability. Consumers are seen holding up better than expected, helped in part by softer energy costs, while several emerging economies are benefiting from longer-term structural rebalancing. By region, forecasts were adjusted upward across all major areas: the Americas rose by 0.08 percentage points, Asia-Pacific by 0.17 percentage points, Europe by 0.03 percentage points, and the Middle East and Africa by 0.11 percentage points.

Global inflation is expected to ease from 5.23% in 2025 to 4.74% in 2026. Europe’s inflation is forecast to decline to 3.16% in 2026 from 3.98% in 2025. The Middle East and Africa are projected to see a sharper drop, with inflation falling to 9.21% from 13.99%. In APAC, inflation is expected to decrease slightly to 3.73% from 4.03%. The Americas are also forecast to moderate, decreasing to 3.74% in 2026 versus 4.15% in 2025.

Between August 2024 and December 2025, the US Federal Reserve cut its policy rate six times, for a cumulative reduction of 175 basis points. Over the same period, the European Central Bank (ECB) began an easing cycle in June 2024 and implemented eight rate cuts. The latest reduction came in June 2025, when the policy rate was lowered by 25 basis points to 2.15%, and it remained unchanged through January 2026. Other countries also adjusted policy rates between early 2025 and January 2026: China cut by 10 basis points, India by 125 basis points, Canada by 75 basis points, Russia by 500 basis points, South Korea by 50 basis points, and Australia by 75 basis points.

In December 2025, global supply chain pressures rose, with the New York Fed’s Global Supply Chain Pressure Index (GSCPI) climbing to 0.51, reversing previous easing (-0.16 in November and -0.09 in October). Drivers included geopolitical frictions, new US tariffs, labor disputes, and climate disruptions. Additional shocks, including facility fires in Italy and Indonesia, and an Aerosucre incident in Colombia, tightened capacity and delayed flows.

In October 2025, the WTO revised its outlook for global merchandise trade, warning that the 2026 forecast has deteriorated sharply: trade volume growth is now projected at 0.5%, down from 2.5%. Elevated tariffs and persistent policy uncertainty are expected to reduce frontloaded purchases as firms run down inventories amid slowing GDP.

Report Scope

• The analyst's Global Macroeconomic Outlook Report identifies, analyzes, and forecasts key development of the global economy. The report provides a 360-degree view of the economy which can be used as a strategic tool to understand market dynamics, business potential and direction of operations.

Reasons to Buy

• Comprehensive Insights: Offers a detailed analysis of global economic trends, including growth projections, inflation, and policy shifts across major regions and countries.
• Data-Driven Forecasts: Includes robust data on economic performance indicators, helping businesses and investors make informed decisions for 2024 and beyond.
• Regional Comparisons: Provides comparative analysis of economic prospects across the Americas, Europe, APAC, and MEA
• Expert Analysis: Features expert commentary on key factors shaping the global economy, such as geopolitical developments, trade dynamics, and fiscal policies.