Moody’s Analytics projects that global GDP growth will continue to lose momentum over the next several years, as a slowdown in trade and investment takes hold across key markets. The firm expects worldwide growth to decline to 2.5% in 2026 and edge up slightly to 2.6% in 2027, following estimated expansions of 2.7% in 2025 and 2.8% in 2024.
According to Stefan Angrick, who heads Japan and frontier markets economics at Moody’s Analytics, annual economic growth in the United States is set to taper off, averaging less than 2% between 2025 and 2027, a marked drop from the almost 3% pace forecast for 2024.
Across Europe and Asia, softer export activity will weigh heavily on the recovery. While fiscal measures in Europe are likely to prevent a deeper downturn, policymakers in Asia are expected to hold back on providing additional stimulus. Moody’s estimates China’s GDP will rise by just under 4.5% in 2026, down from approximately 4.9% in 2025.
While recently struck trade agreements have temporarily alleviated some pressures, unresolved disputes continue to generate uncertainty. An ongoing pattern of sporadic disruptions and short-term fixes is likely to keep tension elevated, especially for advanced economies with close economic ties to the U.S. These nations remain exposed to both rising competition from China and, in Europe’s case, increased energy costs.
Angrick stated that changes to U.S. tariff policies may bring some short-term relief but are not expected to remove the drag on exports. Export-oriented Asian economies, whose reliance on trade has intensified since the pandemic, are finding some buffer from weakening local currencies. For instance, the sharp decline of the yen — down over 30% since 2019 — has helped offset American tariffs.
By contrast, European economies are facing similar tariffs to those in advanced Asia, but the stronger euro is making their exports even less competitive, further amplifying the effects of trade restrictions.
