Economic and financial risk insights:
Strong growth momentum and high geopolitical tensions
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We forecast solid global real GDP growth in 2026, with upside to our forecasts for key markets. Growing geopolitical instability and scope for military intervention are key sources of volatility and risk to the outlook.
The US economy starts 2026 with strong carry-over momentum driven by government reopening after its shutdown, large fiscal stimulus lifting incomes in Q226, and stronger labour productivity. US hiring declined in late Q4, partially due to delayed public sector layoffs, but a fall in the unemployment rate implies stable underlying economic conditions.
In Europe, we expect Germany's EUR 1trn fiscal stimulus to support euro area growth this year, offsetting consolidation efforts by peers. In China, despite strength in PMI data, we see growth moderating due to soft household consumption and fading fiscal support.
US labour productivity outperformance