QNB has projected a modest improvement in global economic growth for 2026, forecasting a rate of 3.2 percent, slightly above broader expectations. The bank’s weekly report said this figure indicates a modest acceleration in activity, though it remains below long-term trends.
The report examined conditions in the three largest economies, which together account for nearly 60 percent of global output. In the United States, growth is expected to remain strong, driven by household spending and investment flows. Household balance sheets are in their healthiest condition in decades, and unemployment rates remain low, supporting consumption. The report highlighted the growing role of artificial intelligence in boosting investment and productivity through the adoption of new technologies.
QNB also noted that the Federal Reserve is shifting its policy stance from tightening toward a neutral position. The report projected the federal funds rate could be reduced to 3.5 percent by the end of 2026, which would encourage investment and consumption by lowering borrowing costs and increasing the appeal of new business activity. These factors are expected to contribute to U.S. growth of around 2.2 percent next year.
For China, the report signaled a potential slight slowdown in growth. Strong exports, robust domestic demand, and rising productivity are expected to sustain expansion near the government’s 5 percent target. Despite trade tensions and higher U.S. tariffs in 2025, China’s trade surplus surpassed one trillion dollars, aided by companies redirecting shipments to alternative markets. The report also noted the ongoing shift from low-value consumer goods to advanced technology and high-value manufacturing, which is strengthening China’s position in global supply chains and supporting productivity growth. Fiscal support and gradual monetary easing are expected to further bolster domestic consumption.
In the Euro area, QNB projected slightly faster growth, underpinned by fiscal spending and a more accommodative monetary policy. The European Union’s Next Generation EU program contributed about 0.5 percentage points to growth in 2025 and may continue to provide support in 2026. Defense spending in response to the Russia-Ukraine war added more than 1 percent to GDP in over 16 participating countries. The European Central Bank has cut interest rates from 4 percent in mid-2024 to 2 percent by June 2025, encouraging private-sector credit growth. Economic indicators showed an expansion in the services sector during the last four months of 2025, which is significant, as services account for roughly 70 percent of the Euro area economy. QNB expects the region’s GDP to grow 1.5 percent next year, surpassing previous forecasts.
The report suggests that global economic activity will see gradual acceleration in 2026, supported by strong performance in major economies, fiscal and monetary policy measures, and technological innovation.
