KUALA LUMPUR (Nov 19): Global gross domestic product (GDP) growth will slow to 2.5% in 2026 and 2.6% in 2027, from an estimated 2.7% in 2025 and growth of 2.8% in 2024, due to slowing trade and investment, according to Moody’s Analytics Inc.

Stefan Angrick, head of Japan and frontier markets economics in Moody’s Analytics, said in a statement Wednesday that annual United States growth will average less than two % from 2025 to 2027, far off the near-3% pace of 2024.

Europe and Asia will stumble as exports weaken. Fiscal policy will help put a floor under growth in Europe.

“Policymakers in Asia will be more reluctant to offer support. China’s GDP growth will slow to just under 4.5% in 2026, from an estimated 4.9% in 2025,” he said.

Furthermore, Angrick said recent trade deals deliver short-term relief but leave key disputes unresolved.

“Our baseline assumes no escalation in trade frictions. However, periodic flare-ups followed by temporary resolutions are likely to fuel a persistent undercurrent of uncertainty. Advanced economies in America’s orbit, already squeezed by Chinese competition (and higher energy costs in Europe’s case), are the most exposed,” he explained.

Although the latest updates to US tariff settings will bring some relief, duties will still hurt.

He said export-led growth is the backbone of many Asian economies, a pattern the pandemic only reinforced. But currency movements are cushioning the blow from US tariffs.

Asia-Pacific currencies have sunk well below their pre-pandemic averages. The yen has fallen more than 30% since 2019.

“Most EU economies face duties similar to those imposed on developed Asian economies, but the euro has strengthened rather than weakened, adding to the drag from tariffs,” he added.

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