Page 10 - Policy Economic Report- June'26

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

Figure 1: Global Real GDP Growth (% change)

Source: S&P Global Market Intelligence

Growth Forecast - Advanced Economies

Advanced economies are expected to witness slower economic growth in 2026 as elevated energy prices,
persistent inflationary pressures, tighter financial conditions, and heightened geopolitical uncertainty
continue to weigh on investment, industrial activity, and consumer spending.

• United States: Growth is projected to moderate from 2.8 % in 2025 to 2.2 % in 2026, reflecting
the impact of elevated energy prices, tighter financial conditions, and persistent policy
uncertainty. Resilient private consumption, continued investment in artificial intelligence and
advanced technologies, and fiscal support are expected to underpin economic activity. Growth is
projected to moderate further to 2.1 % during 2027–28.

• Euro Area: Growth is projected to slow from 1.2 % in 2025 to 0.8 % in 2026, reflecting higher
energy prices, subdued domestic demand, weak industrial activity, and tighter financial
conditions. Growth is expected to recover modestly to 1.3 % during 2027–28, supported by easing
inflation, improving investment, and a gradual recovery in trade.

• Japan: Growth is projected to moderate from 1.1 % in 2025 to 0.7 % in 2026, owing to weaker
external demand, slower private consumption, and higher energy import costs. Growth is
expected to improve modestly to an average of 0.8 % during 2027–28, supported by stronger
wage growth and domestic demand.

• United Kingdom: Growth is projected to remain subdued at 1.0 % in 2026, reflecting weaker
investment, elevated borrowing costs, and persistent inflationary pressures. Growth is expected
to strengthen to 1.4 % during 2027–28 as inflation moderates and financial conditions gradually
improve.

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