Global Growth Forecast Cut to 2.4% as Middle East Conflict Disrupts Trade and Energy
S&P Global cut its 2026 global GDP growth forecast to 2.4%, down half a percentage point since February, citing the Middle East conflict's impact on energy supplies and rising inflation. The outlook is the weakest since 2009 excluding the pandemic.
Downward Revision
Our annual global real GDP growth forecast for 2026 has been cut by half a percentage point since February, to 2.4%. Excluding 2020's pandemic-driven plunge, this would be the weakest growth rate since 2009.
Regional Impacts
The Middle East has suffered the largest reductions. Many of Asia-Pacific's economies are major net energy importers, heavily reliant on oil and gas supplies from the Gulf and relatively sensitive to swings in global demand. Some of Western Europe's largest economies are vulnerable for similar reasons, with many struggling to generate any growth momentum even before the conflict.
Inflation Pressures
Consistent with higher energy price assumptions, we have raised our consumer price inflation forecasts. This primarily reflects the direct effects of higher energy prices, but also some signs of broadening price pressures.
Monetary Policy Shifts
We now expect a (modest) rise in policy rates by the European Central Bank during the second quarter. Also, the rate cuts that we previously expected from the US Federal Reserve and the Bank of England this year have been pushed back to 2027.