Global economy to grow 2.8 per cent in 2027, says Goldman Sachs
Lower energy costs and increased artificial intelligence spending are expected to support steady global economic expansion.
The global economy is projected to expand by 2.8 per cent in 2027, up from an estimated 2.7 per cent in 2026, according to a report by the Times of India. Goldman Sachs Research suggests that declining energy prices and continued investment in artificial intelligence (AI) will support this growth.
Jan Hatzius, chief economist and head of Goldman Sachs Research, said the year is expected to see solid but unremarkable GDP growth, noting that the factors driving growth in 2026 will change.
Global nominal investment in AI is forecast to rise to $1.8 trillion in 2027 from $1.1 trillion in 2026, primarily due to hardware spending in the US. Goldman Sachs estimates this investment will add 0.4 percentage points to global GDP growth.
Commodity analysts at the bank expect Brent crude to drop to $78 per barrel by the end of 2027 as Middle East supply conditions stabilise. This shift in energy prices is expected to move from being an economic drag to providing modest support for growth.
India is projected to remain one of the fastest-growing major economies with a GDP expansion of 7.2 per cent in 2027, down from 7.9 per cent in 2026. China is forecast to grow by 4.5 per cent in 2027, though weak domestic consumption and property sector issues remain concerns.
The bank warned that risks such as geopolitical tensions in Iran, widening fiscal deficits, and uncertainty regarding technology spending could pressure global growth.