Kearney's 2H Global Economic Outlook 2025–2027 warns of "unsteady ground" ahead

• The volatility and fragmentation in the global economy is structural, not temporary.
• Economic policy uncertainty, sticky inflation, geopolitical risk, and the proliferation of protectionism and industrial policies contribute to continued downside pressures.
• Asia and Australasia is once again the world's fastest-growing region, followed by the Middle East and Africa.

WASHINGTON, Oct. 21, 2025 /PRNewswire/ -- Kearney's Global Business Policy Council today released its Global Economic Outlook 2025–2027: 2H 2025, titled Unsteady ground. The report warns that the world economy is entering a period of structural volatility defined by slowing growth, intensifying fragmentation, and the rise of new wildcards—from AI disruption to new tariff and non-tariff barriers.

The report forecasts global growth averaging 2.7% through 2027, a modest improvement since the 1H 2025 Global Economic Outlook was published in April, but below January 2025 projections. While AI investment, frontloaded trade activity, and select regional resilience have partially offset some short-term pressures, deeper forces are reshaping the global landscape. Kearney points to foundational changes transforming the economic outlook as trade, technology, and energy dependencies increasingly serve as instruments of geopolitical leverage.

"Volatility and fragmentation are no longer temporary shocks—they are the new baseline," said Erik Peterson, partner and managing director of Kearney's Global Business Policy Council. "Businesses must adapt to a world where competitive advantage depends as much on navigating geopolitical risk and resilience as on innovation and efficiency."

The analysis underscores major divergences across regions. Asia and Australasia will remain the fastest-growing region, averaging 3.7% growth through 2027, led by India—the world's fastest-growing large economy. The Middle East and Africa follows at 3.5%, driven by strategic investments and economic diversification. The Americas and Europe face more muted growth prospects at 2.1 percent and 1.3 percent growth, respectively.

A defining wildcard that will shape the broader outlook is the rapid adoption of artificial intelligence, with global AI investment projected to reach $375 billion in 2025 and potentially $500 billion by 2026. While AI promises productivity gains of up to 1.3% annually, Kearney warns that benefits may concentrate among leading firms and economies, amplifying inequality and reshaping competitiveness.

"Opportunities abound for disruptors willing to reimagine business models, invest in resilience over efficiency, and lean into values that resonate with employees, customers, and the communities in which they operate," notes Terry Toland, principal at Kearney's Global Business Policy Council and co-author of the report. "On such unsteady ground, the companies that invest in resilience, diversify risk, and lead with purpose will define the next era of global growth."

About Kearney

Since 1926, Kearney has been a leading management consulting firm and trusted partner to three-quarters of the Fortune Global 500 and governments around the world. With a presence across more than 40 countries, our people make us who we are. We work impact first, tackling your toughest challenges with original thinking and a commitment to making change happen together. By your side, we deliver—value, results, impact. To learn more about Kearney, please visit www.kearney.com.

For past editions of the Global Economic Outlook, please go to: https://www.kearney.com/service/global-business-policy-council/thought-leadership/global-economic-outlook.

For more information, contact the Global Business Policy Council ([email protected]).

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SOURCE Kearney