The global economy is projected to grow at a moderate pace in 2026, supported by looser monetary policies, targeted fiscal stimulus in key economies, and the ongoing artificial intelligence (AI) boom, according to ACCA’s latest Global Economic Outlook. While global growth is expected to remain steady, analysts caution that downside risks persist amid a volatile and unpredictable environment.
ACCA’s third annual economic outlook report highlights that global GDP demonstrated unexpected resilience in 2025, despite significant trade disruptions and widespread policy uncertainty. This stability is expected to continue into 2026, with global growth likely to expand by around 3%, broadly mirroring last year’s performance. However, the report stresses that risks remain skewed to the downside, and the global economic backdrop continues to be fragile.
Former IMF chief economist Ken Rogoff, interviewed for the report, described the global economy as “solid but not exciting,” while cautioning that financial markets may underestimate the scale of uncertainty. Rogoff warned of the possibility of a substantial stock market correction within the next three years, even as markets could continue rising in the short term. He highlighted that the long-term effects of current US policies could pose negative consequences for the economy in 2027 and 2028, noting, “Populist policies work until they don’t.”
Jonathan Ashworth, ACCA’s chief economist and author of the report, emphasised that steady growth in 2026 will be aided by monetary easing, fiscal support, and the AI-driven productivity boom. He identified the US as likely to be the fastest-growing G7 economy, with the administration focusing on growth acceleration ahead of mid-term elections. Ashworth also warned that heightened geopolitical tensions, trade uncertainties, and potential threats to the Federal Reserve’s independence could undermine stability.
The report identifies three critical themes shaping the 2026 outlook. First, AI developments may boost firm-level productivity, mitigating fears of a market bubble similar to the dot-com era. Conversely, if AI fails to deliver measurable productivity gains, the risk of a market correction could increase. Second, bond market developments in advanced economies remain a key concern, with rising government bond yields potentially increasing debt servicing costs and slowing growth. Factors such as political instability, monetary tightening in Japan, and questions about debt sustainability could act as catalysts. Third, global trade remains fragile due to ripple effects from recent US tariffs, with risks of renewed escalation in trade conflicts.
Business leaders surveyed for the report highlighted AI, geopolitics, trade, the green transition, and cybersecurity as key challenges for 2026. Ashworth stressed that understanding the interplay between economic, political, technological, and geopolitical factors will be essential for both policymakers and business leaders navigating uncertainty.
The 2026 Global Economic Outlook offers detailed analysis of global prospects and strategic insights for finance professionals, enabling them to anticipate risks, capitalise on growth opportunities, and prepare for a rapidly evolving global economic landscape. The report underscores the importance of adaptability, informed decision-making, and long-term planning in an environment characterised by volatility and structural change.
Global finance leaders and policymakers are encouraged to integrate these insights into strategies that account for technological innovation, trade dynamics, and macroeconomic stability to achieve sustainable growth. The full ACCA report provides a comprehensive guide for stakeholders seeking to understand the challenges and opportunities shaping the global economy in 2026.
Follow thePakBanker Whatsapp Channel for updates across Pakistan’s banking ecosystem.