The shock of steep US import tariffs was followed by trade agreements and a truce with China, helping to stabilise sentiment. Consumer spending remained resilient, supported by strong investment—particularly in artificial intelligence (AI) infrastructure. However, a softer labour market prompted the Federal Reserve (‘Fed’) to cut rates twice in the autumn. The record-long government shutdown will weigh on Q4 growth, leaving full-year 2025 growth at around 2.0%, down from 2.8% in 2024 but far from alarming.
For 2026, we expect growth to slow early in the year before regaining momentum. Our forecast: 1.9% for the full year—a modest dip, not a recession. Planned tax cuts and deregulation should underpin consumer spending, while robust investment in AI continues to drive growth.
"}},{"componentType":"sectionTitle","title":"Europe Under Pressure from Global Forces"},{"componentType":"paragraph","richBody":{"value":"US tariffs have hurt eurozone growth, while Germany’s weakness—exacerbated by Chinese competition—has been a drag. On the upside, Germany announced a historic €1 trillion stimulus package spanning infrastructure, defence and tax cuts, which should support growth in the years ahead. Still, structural challenges remain: low potential growth and mounting debt concerns, compounded by political turmoil in France.
We expect eurozone growth of 1.4% in 2025, up from 0.9% in 2024. With inflation near the ECB’s 2% target, rate cuts have stopped. Looking ahead, growth is likely to slow to around 1.1% in 2026—a scenario of “muddling through” rather than acceleration.
"}},{"componentType":"sectionTitle","title":"China Shifts Away from US Dependence"},{"componentType":"paragraph","richBody":{"value":"China’s growth slowed to 4.8% amid trade tensions with the US. Efforts to boost domestic consumption have had limited success, with confidence still fragile after the property market crash. Weak spending even triggered deflation—a stubborn challenge. Yet there are bright spots. China has strengthened its position in global industrial goods markets, reducing reliance on the US and expanding exports to Asia, Africa and Europe. It also holds a strategic monopoly in critical raw materials and is pushing hard for technological leadership.
Emerging markets, led by China (4.6% expected growth) and India (+6.3%), will continue to outpace developed economies. Global growth should reach around 3.1% in 2026, slightly below 3.2% in 2025.
"}},{"componentType":"sectionTitle","title":"AI as a Growth Engine"},{"componentType":"paragraph","richBody":{"value":"2025 was a year of massive AI investment—shaping markets and driving growth in key regions. With Trump still in office, geopolitical uncertainty will persist, though it may ease somewhat. Europe and China will fight to maintain and expand their global influence, with Europe facing the tougher challenge.
The big question for 2026: will the expected productivity gains from AI materialise? And for investors: which companies will thrive—and which will fall victim to creative destruction? Stock selection will be more critical than ever for achieving superior returns. Here you can read a more detailed view on AI.
"}},{"componentType":"sectionTitle","title":"Alternative Scenarios"},{"componentType":"paragraph","richBody":{"value":"Diversification remains essential. In our base case—moderate nominal growth and lower policy rates—we expect reasonably positive corporate earnings despite risks. In the upside scenario, stronger growth and profits would likely push long-term rates higher as inflation picks up. In the downside scenario, growth slows sharply—possibly due to a European recession—while inflation and long-term rates fall.
Either way, volatility will persist. 2025 was relatively calm, with only one real bout of market nerves in April. Forecasting is never easy, but our base case points to modest returns compared with previous years. For details, see our outlook for equities and bonds.
"}},{"componentType":"linkList","iconTitle":{"title":"Read more"},"textLinks":[{"url":"/en/personal/investing/market-news-and-views/investment-outlook-2026-home","text":"Investment outlook 2026: Homepage"},{"url":"/en/personal/investing/market-news-and-views/investment-outlook-2026-opportunities","text":"Investment outlook 2026: Opportunities"},{"url":"/en/personal/investing/market-news-and-views/investment-outlook-2026-risks","text":"Investment outlook 2026: Risks"},{"url":"https://assets.ing.com/m/7dfc82cb56e72468/original/Investment-Outlook-2026.pdf","text":"Investment Outlook 2026: Download PDF"}]},{"componentType":"sectionTitle","title":"Good to know"},{"componentType":"paragraph","richBody":{"value":"Growth and inflation estimates are calculated by ING Research and can be adjusted on a regular basis.
Investing involves risks and costs. The value of your investment may fluctuate. Past performance is no guarantee of future results. Read more about the risks of investing.
This publication has been prepared on behalf of ING Bank N.V. and is intended for information purposes only. ING Bank N.V. obtains its information from sources deemed reliable and has taken the utmost care to ensure that the information on which it based its views in this publication was not incorrect or misleading at the time of publication. ING Bank N.V. does not guarantee that the information it uses is accurate or complete. The information contained in this publication may be changed without any form of announcement. Copyright and data file protection rights apply to this publication. Data from this publication may be reproduced provided that the source is stated. ING Bank N.V. has its registered office in Amsterdam, commercial register no. 33031431, and is regulated by the Dutch central bank De Nederlandsche Bank (DNB) and the Netherlands Authority for the Financial Markets (AFM). ING Bank N.V. is part of ING Groep N.V.
"}}]}}}