Page 6 - Policy Economic Report - Jan 2026

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

Economy in Focus

1. A snapshot of the global economy

Global economic growth
According to IMF, global growth will hold steady at 3.3 percent this year, an upward revision of 0.2
percentage points compared to October estimates, with most of the improvement accounted for by the
United States and China. The growth is driven by easing trade tensions, higher-than-expected fiscal
stimulus, accommodative financial conditions, the agility of the private sector in mitigating trade
disruptions and improved policy frameworks especially in emerging market economies.

Figure 1: Global GDP growth, relative to October 2024 estimates, % points

Source- IMF

Growth in advanced economies is projected to be 1.8 percent in 2026 and 1.7 percent in 2027.

• In the United States, the economy is projected to expand by 2.4 percent in 2026, supported by
fiscal policy and a lower policy rate.

• In the euro area, growth is expected to remain steady at 1.3 percent in 2026 and at 1.4 percent
in 2027. The slightly faster growth in 2027 reflects projected increases in public spending, notably
in Germany, alongside continued strong performance in Ireland and Spain.

• In Japan, growth is projected to moderate from 1.1 percent in 2025 to 0.7 percent in 2026 and to
0.6 percent in 2027.

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