Perspectives
25 June 2026
In his mid-year outlook, Macquarie's Chief Economist Ric Deverell discusses how the global economy remained resilient in the first half of the year despite the Middle East conflict, and what’s to come in the second half.
Despite a global energy shock and heightened uncertainty triggered by the Middle East conflict, global economic growth looks to have slowed only modestly in the first half of 2026 – consistent with the pattern over the past decade – as oil inventories and artificial intelligence (AI) spending have acted as shock absorbers.
With oil futures prices now significantly below their recent peak and AI capital expenditure continuing to rise, though risks remain, global growth is expected to accelerate over the coming year, expanding by an above average 3 per cent.
As the centre of the global AI boom, the United States is expected to lead the economic rebound as investment growth broadens beyond AI and into wider capital expenditure.
Despite strong export performance, China's growth has fallen below the government's stated target of 4.5–5.0 per cent, meaning authorities will likely look to boost domestic demand.
European output is expected to gradually recover as disruption to oil supplies eases. However, higher inflation and a rise in interest rates mean growth will likely remain below trend until next year.
Growth in Australia is expected to remain subdued for much of 2026 as the combined impact of interest rate increases and the Federal Budget weigh on the housing market. A rebound, however, is expected into 2027.
The full report is available to clients via the Macquarie Insights portal.
Source: Macquarie Group Mid-Year Economic and Market Outlook, 2026
Author: Ric Deverell, Chief Economist, Macquarie Group
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