Developments in the global economy

Our planning is based on the assumption that global economic output will grow overall in 2026 at a similar pace to 2025. Falling inflation in major economic regions and the gradual easing of monetary policy as a result are expected to boost consumer demand. We continue to see risks in the increasing fragmentation of the global economy and protectionist tendencies, turbulence in the financial, energy and commodity markets, and structural deficits in individual countries. In addition, continuing geopolitical tensions and conflicts are constraining growth prospects; risks stem in particular from the Russia-Ukraine conflict and the confrontations in the Middle East, as well as from growing uncertainties regarding the economic policy stance of the USA and the global increase of geoeconomic measures which could further exacerbate geopolitical tensions. We anticipate that advanced economies will maintain, on average, a momentum comparable to that of the reporting year, while the group of emerging markets is expected to exhibit somewhat softer dynamics.

We also foresee the global economy continuing on a path of steady growth through 2030.

Europe/Other Markets

In Western Europe, we expect the economy to grow at a somewhat slower rate than in the reporting year, with a further decline in the average inflation rate, but we do not expect the European Central Bank (ECB) to make any further key interest rate cuts as a result.

We estimate that the pace of growth in Central Europe will pick up somewhat in 2026, with some countries seeing persistently high though less dynamic price increases than in the previous year. Economic output in Eastern Europe will probably continue to recover at a similar pace to the reporting year following the heavy slump in 2022 as a result of the Russia-Ukraine conflict.

Germany

We expect gross domestic product (GDP) to develop positively in Germany in 2026, with a somewhat higher growth rate than in the previous year. The German inflation rate is likely to decrease somewhat on average over the year, while the labor market situation is unlikely to improve much.

North America

We anticipate continued stable economic growth in the USA in 2026 and expect that, on average, inflation will remain at a similar level to the previous year. The US Federal Reserve is likely to implement further key rate cuts in the course of 2026. For Canada we expect a somewhat slower growth rate than in the previous year, while economic growth in Mexico will probably be somewhat higher than in the reporting year.

South America

The Brazilian economy will most likely record a positive rate of growth in 2026, although it will be somewhat lower than that of the reporting year. Argentina is expected to continue to show positive growth, probably also at a somewhat lower level.

Asia-Pacific

Chinese GDP is projected to grow at a relatively high level in 2026, albeit at a somewhat lower rate than in the previous year. India’s economic growth will likely see slightly lower momentum than in the reporting year. Japan’s economic output is also expected to grow compared with 2025, but at a somewhat slower pace.