World order has shifted, but growth outlook same as year ago, economists say: Reuters Poll

By Hari Kishan

BENGALURU, Jan 28 (Reuters) - Global economic growth will be 3% in 2026, exactly as forecast a year ago, according to a quarterly Reuters poll of economists, suggesting they are unfazed by the abrupt and seismic shift in how the U.S. trades with others and treats its allies.

But unusual stability across ​a range of views at a time of so much upheaval suggests trouble may be lurking underneath, some forecasters say, particularly given the world economy already was ‌growing at about that same pace in the years since the pandemic.

Many say the effects of U.S. President Donald Trump's sweeping tariffs announced last year and the resulting disruption to business are only starting to appear, with the ‌added uncertainty of a pending Supreme Court ruling on their legality. That makes coming up with numbers more difficult.

FURTHER GEOPOLITICAL SHOCKS THE MAIN RISK

A majority of 220 economists polled from around the world revised back up their 2026 view in recent months and cited "further geopolitical shocks" as the main downside risk now most central banks are done or nearly done cutting interest rates.

A sharp correction in frothy global equity markets, which touched record highs again this week, came second in Reuters polls conducted from January 6-28.

"Upside surprises to global growth are very welcome given all the geopolitical and trade policy ⁠uncertainties over the past year, but this is not a ‌global economy that is firing on all cylinders," wrote economists at HSBC.

"Many of the upside surprises to growth have been delivered by three AI-related driving forces which are offsetting headwinds from trade fragmentation, weakening demographics and high government debt."

Continued strong U.S. investment in artificial intelligence as well as a ‍short-term boost from expected tax rebates could further lift overall growth in the world's largest economy, even if concerns linger about the strength of the job market.

So economists have been revising back up their global growth forecasts and now the consensus is the same as what it was last year.

U.S. GROWTH REVISED UP SHARPLY

But that was before Trump last April upended an increasingly integrated system of global trade by slapping hefty ​tariffs on most economies, including some of the closest U.S. allies, and using tariffs erratically as a negotiation tool.

Asset prices tumbled, and in April economists ratcheted down their views for ‌2025 to 2.7% and 2.8% for the current year. That was a large revision in such a short period of time by historical standards, and it came with a warning recession risks were rising.