Goldman Sachs projects global GDP will grow 2.8% in 2027, supported by lower energy prices and AI investment, with risks tilted to the downside.
The global economy is expected to grow 2.8% in 2027, compared with an estimated 2.7% in 2026, according to a research report by Goldman Sachs. Jan Hatzius, chief economist and head of Goldman Sachs Research, said the United States, Japan and the United Kingdom are expected to outperform consensus growth estimates, while South Korea and Taiwan are projected to benefit from continued strength in AI-related exports.
Goldman Sachs' commodity strategists expect Brent crude to fall to $78 per barrel by the end of 2027 as supply conditions in the Middle East normalise. The report said lower energy prices were expected to shift from being a drag on economic activity to providing modest support for global growth.
AI investment is also expected to remain a significant contributor. Global nominal investment in AI is projected to rise to $1.8 trillion in 2027 from $1.1 trillion in 2026, driven largely by higher spending on hardware in the US. Goldman Sachs estimates that AI investment will add 0.4 percentage points to global GDP growth in 2027, with its contribution to US economic growth projected at 0.6 percentage points.
"We expect another year of solid but unremarkable GDP growth in 2027, but several of the impulses that shaped global growth in 2026 will look different," Hatzius said.
"Even with the expected slowdown, the impact on GDP growth will be sizable," Hatzius said.
Among major economies, China is forecast to grow by 4.5% in 2027, slightly above the consensus estimate of 4.4%. However, weak domestic consumption and continued weakness in the property sector are expected to constrain domestic demand.
Goldman Sachs said risks to global growth remained tilted to the downside, identifying a renewed escalation in Iran, widening fiscal deficits and lower-than-expected AI capital expenditure as potential sources of pressure. Inflation is expected to moderate as energy prices decline, potentially giving central banks room to move towards monetary policy easing later in 2027.
Sources
This article was drafted with AI assistance and checked against the sources above. Company claims are reported as claims. Cover image is AI-generated.
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