Economic Resilience Masks Hidden Dangers
The global economy has shown resilience in the face of various shocks, including an oil crisis and geopolitical turmoil. Despite slowing growth in the US and deteriorating trade balances in Europe, the world economy has managed to absorb these shocks without entering a recession.
The US consumer continues to spend strongly, while investment in artificial intelligence is helping sustain demand. However, inflation remains above central bank comfort levels, with US consumer inflation at 3.7% in July and core inflation at 3.3%. The Federal Reserve faces the challenge of addressing softer headline growth alongside stubborn inflation.
In Europe, energy imports have surged, leading to a trade deficit of €7.8 billion in May compared to a €1 billion deficit in April. Energy intensity has fallen, renewable generation has expanded, and supply chains have adapted, making the world economy more flexible. However, this flexibility has been bought with enormous investment and complex financial interdependence.
The IMF projects global growth of 3% in 2026 and 3.4% in 2027, but inflation is forecast to be higher than expected at 4.7% this year. The technology-driven investment boom, particularly in artificial intelligence, has become a key support for global activity.