Global Economy Remains Resilient Amid Rising H2 Risks
The world economy remains resilient despite rising risks in the second half of 2026, according to Nomura's latest report. The company cited energy price shocks, inflation, and higher bond yields as key challenges.
AI transformation and agile government policies have provided support for growth, while US-Iran tensions, El Nino, and a possible AI setback pose risks. Business investment is broadening beyond AI, and consumption has held up despite higher energy prices linked to the Iran war.
In the US, Nomura expects continued solid growth, elevated inflation, and the Federal Reserve to remain on hold. The company forecasts fourth-quarter 2026 core Personal Consumption Expenditure inflation at 3.2 per cent year-on-year, with risks skewed to the upside.
The euro area economy was resilient in the first half of 2026 despite the Iran war, with gross domestic product excluding Ireland growing 0.3 per cent quarter-on-quarter in each quarter. Euro area headline Harmonised Index of Consumer Prices inflation stood at 2.9 per cent YoY in July.