Forecasts at a Glance

The global economy faces headwinds from the Iran war and potential US trade wars, which are slowing growth and elevating inflation despite resilient labor markets and healthy household balance sheets. Berenberg forecasts 2026 global GDP growth at 2.4%, with US growth slowing to 1.8% and the Eurozone at 0.6%.

Key Takeaways

• 1.The Iran war and Strait of Hormuz closure are the primary risks, threatening to slow global growth and raise inflation via energy prices.
• 2.US economic growth is being dampened by the 'Trump factor,' including tariffs, uncertainty, and immigration crackdowns affecting trend growth.
• 3.China is transitioning to a period of structurally slower growth, with stimulus measures likely only providing temporary support.

Table of Contents

• Global outlook: positive fundamentals, Iran war damage
• Forecast changes
• US: Trump’s policies dampen the fireworks
• China: serious challenges after years of capital misallocation
• Japan: policy normalisation
• UK: disinflation delayed
• Eurozone: Iran war and US tariffs hurt, domestic policies support growth
• Germany: big fiscal boost
• France: political uncertainty and a risk of reform reversals
• Italy: modest reforms and a fiscal boost support domestic demand
• Spain: following through on significant catch-up potential
• Portugal: rapid – but volatile – growth
• Key financial forecasts

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