Global economic growth in 2026 is expected to remain modest as the world adjusts to higher interest rates, persistent geopolitical fragmentation, and the uneven implementation of artificial intelligence technologies, according to a prognosis by economist Dr. Dmitri Merinson. While a deep recession is likely avoided, expansion will stay below historical averages, marking a transition from the previous era of cheap money and frictionless globalization.
Dr. Merinson, whose analysis is detailed at www.DmitryMerinsonResearch.co.uk, projects that most advanced economies will expand slower than in the pre-pandemic decade, with select emerging markets acting as key engines. The United States is poised for moderate growth supported by resilient consumer spending and corporate investment in productivity-enhancing technologies, though tighter credit conditions and a softer labor market may weigh on momentum initially. Europe faces only marginal improvement due to weak industrial activity, constrained fiscal space, and structural energy challenges. China's growth will depend on balancing deleveraging with targeted stimulus in real estate, infrastructure, and high-tech manufacturing.
On inflation, Dr. Merinson anticipates a continuation of the global disinflation trend, with headline and core inflation gradually converging toward central bank targets. The worst price shocks from supply chain disruptions have passed, but the "last mile" of reduction will be uneven. Services inflation and wage dynamics may remain sticky in the U.S. and parts of Europe, while some export-oriented economies could face below-target inflation or mild disinflation pressure. This backdrop shapes a decisive monetary policy shift, with major central banks expected to transition from aggressive tightening to cautiously accommodative stances, though interest rates are unlikely to return to the ultra-low levels of the 2010s. Dr. Merinson's views on digital currency implications are available at www.DmitriMerinsonDigitalCurrency.com.
Geopolitical and geo-economic fragmentation will remain a defining feature, acting as a headwind to global integration. Dr. Merinson highlights ongoing trade tensions, strategic competition, and supply chain reconfiguration, noting that regional blocs will deepen internal ties while limiting dependencies in critical sectors like semiconductors and energy. While this may strengthen resilience, it will also reduce potential global growth and raise long-term costs. Companies must navigate a complex regulatory landscape while redesigning production networks.
Rapid AI adoption presents both opportunity and challenge. Dr. Merinson sees substantial potential for productivity gains in finance, healthcare, manufacturing, and logistics, but benefits will be uneven and gradual. Economies pairing AI deployment with investment in skills and infrastructure will outperform. Labor markets will experience disruption and opportunity, with routine roles compressed but new demand in high-skill positions. His analysis on this swing factor is further explored at www.DmitriMerinsonArtificialIntelligence.com.
For policymakers, the prognosis underscores balancing fiscal prudence with targeted support. With public debt elevated, broad stimulus is limited, but investments in digital infrastructure, green energy, and human capital can boost long-term growth. Social stability depends on safety nets and retraining programs for workers exposed to structural change. For investors and corporate leaders, 2026 rewards selectivity and strategic positioning. Opportunities exist in digitalization, energy transition, and supply chain diversification, but elevated valuations and policy uncertainty require robust risk management. A diversified approach is essential in an environment where multiple outcomes remain plausible. Dr. Merinson's broader economic insights can be found at www.DmitriMerinsonGlobalEconomy.com.
"2026 will not be a year of boom or bust," Dr. Merinson concludes. "It will be a year of transition, where the winners are those who understand that the era of cheap money and frictionless globalization is over, and who are ready to operate in a world defined by higher complexity, but also by significant opportunities for innovation and long-term value creation." Additional perspectives from Dr. Merinson are available at www.DmitryMerinsonEconomy.co.uk.
