2026: the year of new beginnings
Trump’s tariffs didn’t trigger an immediate shock in 2025. Instead, trade held up for a while thanks to early shipments, inventory shifts and strong demand for AI-related goods. The real impact is still unfolding and will likely spill well into 2026.
The old meets the new in the us
The US heads into 2026 with solid spending at the top of the income ladder. However, lower earners are feeling the bite of higher prices. Rate cuts, new government spending, and steady growth in AI investment should keep the economy moving, though the midterms could add uncertainty.
A rebound for europe?
It looks like Europe is in fact starting to find its footing again, helped in large part by Germany’s large-scale investment plans and ongoing EU support for Southern countries. Growth will vary across the region, with France moving more slowly. In other positive news, inflation looks to be under control for now, giving the ECB room to keep policy steady as the recovery continues to build.
Japan’s balancing act
Japan finally moved out of its deflation era this year, with inflation close to 2% and wages picking up. In 2026, new prime minister Sanae Takaichi aims to push pay higher through tax incentives and more green and digital investment. The Bank of Japan may face calls to raise rates, but it will likely move only slightly as it will likely need to balance its monetary policy with the government’s focus on fiscal stimulus.
Emerging momentum
Emerging markets have held up well against recent shocks, thanks to stronger policies and improving central bank credibility. With lower debt than advanced economies and growth near 4%, they should keep outpacing developed markets, with India moving into the top global ranks. As US rate cuts ease pressure and the dollar softens, these economies gain more room to grow. China also continues to deepen regional ties, promoting a multipolar narrative to challenge US dominance.
December 11, 2025
