Goldman Sachs predicts 2.8% global economic growth in 2027, fueled by AI investment and lower energy costs. While India is projected to grow by 7.2%, the outlook faces potential downside risks from geopolitical tensions and deficits.
New Delhi [India], November 14 (ANI): The global economy is expected to grow by 2.8 per cent in 2027, slightly higher than the projected 2.7 per cent growth in 2026, as easing energy prices and continued investment in artificial intelligence (AI) support economic activity, according to Goldman Sachs Research.
In its “Global Economic Outlook 2027” research note, Goldman Sachs said lower energy prices and strong AI-related investments are expected to offset the impact of tighter financial conditions and reduced support from government spending. Jan Hatzius, Chief Economist and Head of Goldman Sachs Research, said, “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.”
The research note highlighted that energy prices, which weighed on global economic growth in 2026, are expected to provide a modest boost in 2027 as supply conditions improve. Goldman Sachs’ commodity analysts expect Brent crude oil prices to decline to USD 78 per barrel by the end of 2027, alongside a similar easing in global liquefied natural gas prices. However, Europe is expected to continue facing pressure from higher energy costs as the impact of earlier price increases gradually reaches consumers.
The report also projected that global AI investment will increase to USD 1.8 trillion in 2027 from USD 1.1 trillion in 2026, largely driven by higher spending on hardware in the United States. Goldman Sachs estimated that AI investment alone could contribute 0.4 percentage point to global GDP growth in 2027. “Even with the expected slowdown, the impact on GDP growth will be sizable,” Hatzius said, referring to the expected moderation in AI investment growth.
Among major economies, India is projected to grow by 7.2 per cent in 2027, compared with 7.9 per cent in 2026. Despite the moderation, India’s projected growth remains above the consensus estimate of 6.8 per cent. China’s economy is expected to expand by 4.5 per cent in 2027, compared with 4.6 per cent in 2026, while the US economy is projected to grow by 2.4 per cent, up from 2.3 per cent.
Goldman Sachs also expects global inflation to ease as energy prices decline. In the US, core inflation, measured by the Personal Consumption Expenditures (PCE) index, is forecast to fall to 2.4 per cent by the end of 2027 from 3.2 per cent at the end of 2026. However, the research note cautioned that risks to the global growth outlook “are tilted to the downside.” It warned that renewed escalation in the Iran war could push energy prices higher again, while large government deficits could raise borrowing costs. Lower-than-expected AI investment, due to capacity constraints, regulatory challenges or weaker demand, could also weigh on global economic growth. (ANI)