Global Economic Viewpoint Mid-Year Review Hydration Break

This report provides a mid-year assessment of the global economy, noting resilience from the AI boom and a fragile peace deal in the Middle East. It highlights a hawkish turn from the US Federal Reserve as a key risk to continued growth.

Key Takeaways

• 1.Global growth forecast revised upward to 3.2% for 2026 and 3.5% for 2027.
• 2.The US-Iran deal is fragile but has temporarily eased stagflationary pressures, leading to lower oil price forecasts.
• 3.Despite energy price relief, persistent inflation in the US is forcing the Fed to maintain a hawkish stance, with 75bp of hikes expected in 2026.

Table of Contents

• Global letter: Hydration Break
• US: From war to Warsh
• China: Exports carry growth as rebalancing stalls
• Euro area: It could have been worse, but still not great
• Japan: Resilient growth, volatile inflation
• UK: BoE on hold in 2026, near-term risks still for a hike
• Canada: Weak growth, steady BoE
• Australia & NZ: Cyclical divergence
• EM Asia (ex. China): Improving growth outlook with greater divergence
• EEMEA: War may be over, but now the Fed
• LatAm: Politics driving the macro-outlook
• Key forecasts
• Detailed forecasts

Document Preview

Page 1 of 5

Subscribe for full accessStart Free Trial