Global Growth Faces an Energy Test

The global economic outlook hinges on the stability of energy prices against the momentum of AI investment and consumer spending. Global real GDP growth is forecasted to reach 3.2% in 2026, supported by a resilient U.S. economy where AI-related capital spending on data centers and infrastructure drives growth. However, a potential energy shock remains a critical uncertainty; while oil is expected to normalize at $90 per barrel, a failure to restore shipments could push prices to $150, shifting the crisis from a price shock to a volume shock characterized by physical supply shortages. Regional exposure varies, with China appearing most resilient due to strategic stockpiling, while Europe faces immediate inflationary pressure as a net energy importer. Consequently, the Federal Reserve will likely maintain current rates through 2026, whereas the European Central Bank may implement two hikes this year to manage energy-driven headline inflation before eventually easing in 2027.