Global GDP growth is projected to remain broadly stable at 2.9% in 2026 before edging up to 3.0% in 2027, sustained by robust technology-related
Real GDP growth in 2026 is projected to be stronger in the current projections, partly because of the effects of the 2025 reconciliation act. In
* [Global - English](https://www.mercer.com/?site=global). [Australia - English](https://www.mercer.com/en-au/). [Belgium - English](https://www.mercer.com/en-be/). [Canada - English](https://www.mercer.com/en-ca/). [Finland - English](https://www.mercer.com/en-fi/). [India - English](https://www.mercer.com/en-in/). [Ireland - English](https://www.mercer.com/en-ie/). [Jordan - English](https://www.mercer.com/en-jo/). [Malaysia - English](https://www.mercer.com/en-my/). [New Zealand - English](https://www.mercer.com/en-nz/). [Oman - English](https://www.mercer.com/en-om/). [Philippines - English](https://www.mercer.com/en-ph/). [Singapore - English](https://www.mercer.com/en-sg/). [Switzerland - English](https://www.mercer.com/en-ch/). [United States - English](https://www.mercer.com/en-us/). [Investment trends](https://www.mercer.com/insights/investments/market-outlook-and-trends/). * . * . * . The US Federal Reserve is likely to continue easing, with markets pricing rates just below 3% by year-end, though cuts may slow if growth firms or inflation remains above target[[3]](#references). [](#download). * [Investment trends](https://www.mercer.com/insights/investments/market-outlook-and-trends/ "Investment trends"). * [### Implementation and OCIO](https://www.mercer.com/solutions/investments/investment-solutions-and-ocio/). [Link to OCIO page](https://www.mercer.com/solutions/investments/investment-solutions-and-ocio/). * [### Sustainable investing](https://www.mercer.com/solutions/investments/sustainable-investment/). [Link to sustainable investment page](https://www.mercer.com/solutions/investments/sustainable-investment/). * [### Alternative investments](https://www.mercer.com/solutions/investments/alternatives/). [Link to alternatives and private markets page](https://www.mercer.com/solutions/investments/alternatives/). * [### Strategic research](https://www.mercer.com/solutions/investments/mercerinsight-community/). [Link to strategic research page](https://www.mercer.com/solutions/investments/mercerinsight-community/). * [### Asset manager research](https://www.mercer.com/solutions/investments/mercerinsight/). [Link to asset manager research page](https://www.mercer.com/solutions/investments/mercerinsight/). * [### Managing investment risk](https://www.mercer.com/solutions/investments/mercer-sentinel/). [Link to Mercer Sentinel page](https://www.mercer.com/solutions/investments/mercer-sentinel/).
# World Economic Outlook Update. World Economic Outlook Update, January 2026: Global Economy: Steady amid Divergent Forces. #### Resilient growth as technology and adaptability offset trade policy headwinds. World Economic Outlook Update, January 2026: Global Economy: Steady amid Divergent Forces. Global growth is projected at 3.3 percent for 2026 and 3.2 percent for 2027, revised slightly up since the October 2025 World Economic Outlook. World Economic Outlook Update, January 2026: Projections Table. ###### World Economic Outlook Update, October 2025: Three Essential Questions. ###### Press Briefing: World Economic Outlook, October 2025. ###### World Economic Outlook, October 2025: Key Facts. ###### World Economic Outlook Update, October 2025: Three Essential Questions. ###### Press Briefing: World Economic Outlook, October 2025. ###### World Economic Outlook, October 2025: Key Facts. ###### World Economic Outlook Update, October 2025: Three Essential Questions. ###### Press Briefing: World Economic Outlook, October 2025. ###### World Economic Outlook, October 2025: Key Facts. Regional Economic Outlook Reports, All Regions.
”The U.S. labor market remains fundamentally resilient, albeit transitioning toward a slower growth phase.”. While these headwinds are likely to weigh modestly on consumption, they are not expected to fundamentally alter the expansionary backdrop created by the One Big Beautiful Bill Act, particularly as robust AI‑related capital expenditures continue to provide an important offset and remain a central pillar of growth momentum in 2026. We continue to view the labor market as fundamentally resilient, albeit transitioning toward a slower growth phase, and we have thus revised our year‑end 2026 unemployment rate forecast to 4.6% from 4.2%. We have revised our year‑end 2026 core inflation forecast up by 0.2 percentage points, driven by renewed firmness in non‑housing services, incremental tariff pass‑through, and higher energy prices amid escalating geopolitical tensions involving Iran. While we retain our expectation for a single policy rate cut in 2026—consistent with the Federal Reserve’s willingness to look through energy‑driven price shocks—the principal risk has shifted toward a longer period of policy inertia, particularly if labor market cooling remains gradual and inflation progress proves uneven.
### [2026 Global Outlook: A Strong Year for Risk Assets](/insights/podcasts/thoughts-on-the-market/global-economic-outlook-2026-cross-asset-perspective-seth-carpenter-serena-tang). **Seth Carpenter:** Yesterday, Serena, we discussed our views on the global economy, and today I'm going to turn the tables on you and start asking you questions about our market outlook and how to invest across regions and across asset classes. And this steepening will be very much driven by what happens in the two-year point – I think as markets continue to, we think, underpriced, future Fed easing and growth slow down tail risks. [Explore Episode](/insights/podcasts/thoughts-on-the-market/global-economic-outlook-2026-cross-asset-perspective-seth-carpenter-serena-tang). ### [2026 Global Outlook: Slower Growth and Inflation](/insights/podcasts/thoughts-on-the-market/global-economic-outlook-part-1-serena-tang-seth-carpenter). **Seth Carpenter:** We really think next year is going to be the global economy slowing down a little bit more just like it did this year, settling into a slower growth rate. Layer on top of that, the Fed who's been clearly willing to start to ease interest rates sooner than we thought at the time of the mid-year outlook – all comes together for a little bit better outlook for growth for 2026 in the U.S. [Explore Episode](/insights/podcasts/thoughts-on-the-market/global-economic-outlook-part-1-serena-tang-seth-carpenter).
* [What We Do](https://www.goldmansachs.com/insights/outlooks/2026-outlooks#). * [Insights](https://www.goldmansachs.com/insights/outlooks/2026-outlooks#). * [Our Firm](https://www.goldmansachs.com/insights/outlooks/2026-outlooks#). * [Careers](https://www.goldmansachs.com/insights/outlooks/2026-outlooks#). * [What We Do](https://www.goldmansachs.com/insights/outlooks/2026-outlooks#). * [Insights](https://www.goldmansachs.com/insights/outlooks/2026-outlooks#). * [Our Firm](https://www.goldmansachs.com/insights/outlooks/2026-outlooks#). * [Careers](https://www.goldmansachs.com/insights/outlooks/2026-outlooks#). * [What We Do](https://www.goldmansachs.com/insights/outlooks/2026-outlooks#). * [Insights](https://www.goldmansachs.com/insights/outlooks/2026-outlooks#). * [Our Firm](https://www.goldmansachs.com/insights/outlooks/2026-outlooks#). * [Careers](https://www.goldmansachs.com/insights/outlooks/2026-outlooks#). * [What We Do](https://www.goldmansachs.com/insights/outlooks/2026-outlooks#). * [Insights](https://www.goldmansachs.com/insights/outlooks/2026-outlooks#). * [Our Firm](https://www.goldmansachs.com/insights/outlooks/2026-outlooks#). * [Careers](https://www.goldmansachs.com/insights/outlooks/2026-outlooks#). . . [ The Global Economy Is Forecast to Post ‘Sturdy’ Growth of 2.8% in 2026](https://www.goldmansachs.com/insights/articles/the-global-economy-forecast-to-post-sturdy-growth-in-2026). [ German Economic Outlook: 1.1% Growth in 2026](https://www.goldmansachs.com/insights/articles/german-economic-outlook-growth-in-2026). [ Investment Banking 2026 Global M&A Outlook](https://www.goldmansachs.com/what-we-do/investment-banking/insights/articles/2026-ma-outlook). [ Goldman Sachs Exchanges: Outlook 2026 Episode 1: The Big Picture](https://www.goldmansachs.com/insights/goldman-sachs-exchanges/goldman-sachs-exchanges-outlook-2026-episode-1-the-big-picture). [ Goldman Sachs Exchanges: Outlook 2026 Episode 2: Regional Perspectives](https://www.goldmansachs.com/insights/goldman-sachs-exchanges/goldman-sachs-exchanges-outlook-2026-episode-2-regional-perspectives). [ Goldman Sachs Exchanges: Outlook 2026 Episode 3: Assets and Allocation](https://www.goldmansachs.com/insights/goldman-sachs-exchanges/goldman-sachs-exchanges-outlook-2026-episode-3-assets-and-allocation). [ Will US Stocks Outperform in 2026?](https://www.goldmansachs.com/insights/goldman-sachs-exchanges/will-us-stocks-outperform-in-2026). [Read Report](https://www.goldmansachs.com/insights/goldman-sachs-research/macro-outlook-2026-sturdy-growth-stagnant-jobs-stable-prices "Read Report"). [Read Report](https://www.goldmansachs.com/insights/goldman-sachs-research/markets-outlook-2026-some-like-it-hot "Read Report"). [Read Report](https://www.goldmansachs.com/insights/goldman-sachs-research/equity-outlook-2026-tech-tonic-a-broadening-bull-market "Read Report"). [Read Report](https://www.goldmansachs.com/insights/goldman-sachs-research/commodity-outlook-2026-ride-the-power-race-and-supply-waves "Read Report"). [Read More](https://www.goldmansachs.com/insights/goldman-sachs-research/uk-outlook-2026-catching-down "Read More"). [Read More](https://www.goldmansachs.com/insights/goldman-sachs-research/euro-area-outlook-2026-cyclical-boost-structural-drag-unchanged-rates "Read More"). [Read More](https://www.goldmansachs.com/insights/goldman-sachs-research/japan-economic-outlook-2026-steady-fundamentals-policy-risks-ahead "Read More"). [Read More](https://www.goldmansachs.com/insights/goldman-sachs-research/global-fx-outlook-2026-different-dollar-downside "Read More"). [Your Privacy Choices](https://www.goldmansachs.com/insights/outlooks/2026-outlooks).
Most members clearly weighted the risks to the labor market more heavily than those of inflation, including Fed Chair Jerome Powell, though he did so while chanting the mantra that “there is no risk-free path for policy.” [[1](https://siepr.stanford.edu/publications/policy-brief/us-economy-2026-what-watch#1)]. Taken together, this research finds little indication that AI has impacted aggregate U.S. labor market conditions so far.[[8](https://siepr.stanford.edu/publications/policy-brief/us-economy-2026-what-watch#8)] Although unemployment has increased, it has risen most among workers in occupations with the least AI exposure, suggesting that other factors are at play. As two of us (Bernstein and Cummings) have written,[[11](https://siepr.stanford.edu/publications/policy-brief/us-economy-2026-what-watch#11)] there are certainly bubbly features: Valuations of AI-exposed firms have risen sharply even as revenue from AI-specific products and services remains limited. For example, Joseph Briggs of Goldman Sachs estimates[[12](https://siepr.stanford.edu/publications/policy-brief/us-economy-2026-what-watch#12)] that generative AI could create $8 trillion of value for U.S. firms through labor productivity gains. Analysis suggests that higher wholesale power costs, investment to replace aging grid infrastructure, extreme weather events, state policies such as net-metered solar and renewable energy standards, and rising demand from data centers and electric vehicles have all contributed to higher prices.[[14](https://siepr.stanford.edu/publications/policy-brief/us-economy-2026-what-watch#14)].