In 2025, the global economic environment experienced an expansion, driven by the combination of moderating inflationary pressures and declining energy prices, accommodative monetary policies, substantial investments in technology and AI, as well as robust fiscal expenditures in major economies. It is estimated that the global economy grew by 3.3% in 2025. Looking forward to 2026, it is anticipated that the persistence of the aforementioned growth drivers, coupled with the diminishing impact of restrictive trade policies, will support a similar annual economic growth rate.

In the advanced economies, Gross Domestic Product (GDP) is projected to have experienced an increase of 1.7% in 2025, following a 1.8% growth in 2024. In the emerging market and developing economies, the GDP is expected to have grown by 4.4% in 2025, consistent with the 4.3% growth recorded in 2024. Projections for 2026 indicate that economic growth will remain robust, with advanced economies and emerging market and developing economies anticipated to achieve growth rates of 1.7% and 4.4% respectively.

In the Euro Area, economic growth experienced moderate acceleration during 2025, with an estimated GDP increase of 1.4%, compared to the 0.9% growth rate recorded in 2024. The Euro Area economy has remained generally subdued due to the lingering effects of the post-Ukraine energy shock, which continued to weigh on manufacturing activity, while the appreciation of the Euro relative to other currencies has affected export competitiveness. The European Central Bank (ECB) implemented four reductions to benchmark deposit rates during 2025, resulting in a cumulative decrease of 100 basis points, with the objective of stimulating economic activity.

Economic growth in the Euro Area for 2026 is projected to reach 1.2%, supported by a combination of internal and external factors. Domestic demand is expected to strengthen, underpinned by rising real wages and improved financing conditions attributable to policy rate cuts initiated since 2024. Additionally, increased fiscal expenditures on infrastructure and defense are anticipated to further bolster growth. On the external front, despite persistent structural challenges, exports are expected to recover as uncertainties surrounding trade policy recede.

In the US, economic expansion was primarily driven by an increase in in technology-related investments, accommodative financial conditions and resilient private sector demand. The estimated economic growth for 2025 in the US is projected at 2.1%, with projections indicating an acceleration to 2.4% in 2026, supported by fiscal measures and a lower policy interest rate. Furthermore, the adverse effects of elevated trade barriers are expected to fade gradually, as bilateral tariffs are scheduled to be reduced until November 2026. At the same time, inflation pressures moderated during 2025; however, inflation remained relatively persistent due to pass‑through effects of tariffs and ongoing cost‑of‑living challenges. The inflation target of 2% is expected to be gradually reached within 2027.

In relation to emerging market economies, economic growth is expected to remain slightly above 4% in both 2026 and 2027, broadly stable compared with recent years, with China and India exhibiting even higher growth rates during this period.

In 2025, the EUR / USD rate strengthened significantly, rising from a low of 1.03 in January to close the year at 1.17, averaging $1.13. The movement was primarily driven by a) diverging monetary policy paths in the second half of the year, as the US Federal Reserve adopted a more accommodative stance compared with the European Central Bank’s relatively neutral policy position, b) heightened trade tensions, including the introduction of tariffs, which weighed on investor sentiment towards the USD and c) improved confidence in the underlying economic fundamentals of the Eurozone.