World Economic Prospects
Each month Oxford Economics’ team of 450 economists updates our baseline forecast for 200 countries using our Global Economic Model, the only fully integrated economic forecasting framework of its kind. Below is a summary of our analysis on the latest economic developments, and headline forecasts. To access the full report (and much more), request a free trial today.
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US and Chinese strength may not be replicated elsewhere
- We’ve raised our 2026 global GDP growth forecast by 0.1ppt to 2.7%, slightly below this year’s estimated 2.8% gain. The move reflects a more positive, above-consensus view on prospects for China. However, we remain relatively bearish on our outlooks for other major economies, partly because stronger Chinese export growth may weigh on exporters elsewhere.
- The recent data flow has been lighter than normal due to the US government shutdown. But available data suggest the global economy was more resilient in Q3 than we envisaged. The JP Morgan Global Composite PMI climbed to a near one and a half year high in October.
- Meanwhile, the recent tariff deal between the US and China is a positive development and will relieve some pressure on Chinese exporters. This, combined with signs that the authorities will continue to focus stimulus towards expanding manufacturing, suggests Chinese industrial activity and exports could be stronger than we previously projected, albeit with lower industrial goods prices too. We’ve raised our 2026 GDP growth forecast for China by 0.4ppts to 4.5%, though this is still slower than this year’s estimated outturn of a 4.8% expansion.
- This revision to our projection for China follows a significant increase in our US GDP growth forecast last month. Compared to September, US and Chinese GDP growth forecasts for 2026 have been raised by 0.4ppts-0.5ppts. By contrast, we’ve increased our rest of the world GDP growth forecast by just 0.1ppt over the same period.
- Our generally below-consensus view on the other major advanced economies and emerging markets might at first sight seem at odds with our relatively optimistic assessment of the world’s two largest economies. However, in addition to cheaper Chinese exports undermining foreign competitors’ own performance, we still expect tariffs to prompt a sustained soft patch for US imports, thereby limiting the spillovers of US domestic strength to other economies.
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