KUALA LUMPUR, Nov 19 — Global gross domestic product (GDP) growth will slow to 2.5 per cent in 2026 and 2.6 per cent in 2027, from an estimated 2.7 per cent in 2025 and growth of 2.8 per cent in 2024, due to slowing trade and investment, according to Moody’s Analytics Inc.
Its Japan and Frontier markets economics head Stefan Angrick said that annual United States (US) growth will average less than two per cent from 2025 to 2027, far off the near-three per cent pace of 2024.
Europe and Asia will stumble as exports weaken. Fiscal policy will help put a floor under growth in Europe.
“Policymakers in Asia will be more reluctant to offer support. China’s GDP growth will slow to just under 4.5 per cent in 2026, from an estimated 4.9 per cent in 2025,” he said in a statement.
Angrick added that recent trade deals deliver short-term relief but leave key disputes unresolved.
“Our baseline assumes no escalation in trade frictions. However, periodic flare-ups followed by temporary resolutions are likely to fuel a persistent undercurrent of uncertainty.
"Advanced economies in America’s orbit, already squeezed by Chinese competition (and higher energy costs in Europe’s case), are the most exposed,” he said.
Although the latest updates to US tariff settings will bring some relief, duties will still hurt.
Angrick noted that export-led growth is the backbone of many Asian economies, a pattern the pandemic only reinforced. But currency movements are cushioning the blow from the US' tariffs.
Asia-Pacific currencies have sunk well below their pre-pandemic averages. The yen has fallen more than 30 per cent since 2019.
“Most European Union economies face duties similar to those imposed on developed Asian economies, but the euro has strengthened rather than weakened, adding to the drag from tariffs,” he said.
