Global Market
Outlook Report
2026

The global economy in 2025 presented a complex picture of divergent regional performances and shifting inflation dynamics. Advanced economies experienced moderate growth averaging 1.8-2.2%, while emerging markets demonstrated more robust expansion at 4.1-4.5% year-over-year (IMF, 2025)

Among major economies, India remained the fastest-growing, expanding at approximately 6.5%, supported by domestic demand and public investment. China's growth moderated to 4.0–4.7%, reflecting structural adjustments. Together, these trends highlight a world economy increasingly driven by emerging markets rather than advanced economies.

Global trade lost momentum in 2025 as tariff escalation and geopolitical uncertainty weighed on cross-border flows. Growth in global goods and services trade slowed to approximately 1.7–2.0%, marking a sharp deceleration from prior years. Rising trade barriers, including an increase in the effective U.S. import tariff rate to around 14%, combined with geopolitical tensions to disrupt trade flows and raise costs across global supply chains.

Unlike the acute, shock-driven disruptions of the pandemic period, the 2025 slowdown reflected a more structural realignment of global trade patterns. Elevated trade policy uncertainty increased effective trade costs and weakened investment appetite, prompting firms to reassess long-standing sourcing and production strategies. As a result, manufacturing footprints and logistics networks continued to shift toward configurations that prioritized resilience and risk diversification over scale efficiency.

Tariff escalation played a central role in this adjustment. Rather than relying on short-term rerouting, companies increasingly redesigned production footprints to reduce exposure to geopolitical risk and cost volatility. This strategic change slowed trade expansion and capital deployment, reinforcing a broader move toward regionalization and supply chain diversification.

Commodity markets experienced geopolitical and weather-driven volatility

Commodity markets experienced notable volatility driven by geopolitical tensions and weather-related disruptions. Energy prices remained elevated but volatile.

Agricultural commodities experienced sharper volatility. Weather-related disruptions in key producing regions drove price fluctuations, particularly in food staples and soft commodities. These pressures reinforced inflation sensitivity in food markets, even as broader price levels eased.

Industrial metals presented a mixed picture in 2025. Copper prices strengthened by an estimated 12–15%, supported by sustained demand from electrification, grid expansion, and energy transition investments. In contrast, iron ore prices softened by roughly 8–10%, reflecting continued weakness in China's construction and property sectors.

Precious metals followed a different trajectory. Gold prices rose by approximately 10–15% over the year, supported by elevated geopolitical risk, central bank purchases, and persistent demand for safe-haven assets amid policy uncertainty. Silver prices were more volatile but broadly higher, benefiting from both safe-haven flows and industrial demand linked to solar and electronics, though gains lagged gold due to weaker cyclical manufacturing momentum.

Sectoral Growth Patterns in 2025

Sectoral performance in 2025 was uneven, with growth increasingly concentrated in productivity-enhancing industries. Technology and digital services continued to outperform, driven by enterprise investment in cloud computing, AI, cybersecurity, and healthcare technology. These sectors benefited from corporate focus on efficiency, automation, and risk management.

Manufacturing growth varied dramatically by sophistication level

Global manufacturing output grew 2.2% year-over-year. Advanced manufacturing segments such as semiconductors and precision equipment outpaced traditional heavy industries, reflecting continued capital reallocation toward higher-value production

Services demonstrated resilient 3.8% global expansion

Services demonstrated resilience as global mobility normalized. Tourism, hospitality, and professional services rebounded strongly, supported by pent-up demand and renewed business activity

Technology sectors maintained robust 6.5–7.8% growth

Technology sectors with B2B enterprise focus (AI, cybersecurity, healthcare tech) are outperforming consumer-focused categories by an average of 11.3 percentage points, indicating businesses are prioritizing operational efficiency investments over consumer experience enhancements.

Energy: In 2025, the energy sector continued its trend toward renewables. At the same time, the rapid expansion of data centres and other technology infrastructure increased electricity demand across both advanced and emerging economies. This highlights the growing challenge of meeting rising energy needs while continuing the transition to low-carbon sources.

The cumulative effect of several years of elevated inflation fundamentally altered consumer behaviour patterns in 2025, creating lasting changes in purchasing priorities and brand relationships. Real wage growth turned positive in many advanced economies for the first time since 2021, averaging 0.8-1.5%, yet consumers remained cautious, shaped by the purchasing power erosion experienced in prior years.

Value-seeking behaviour became deeply embedded across all consumer segments. Private label and store brand market share increased 3-5 percentage points across major retail categories as consumers discovered quality alternatives to national brands. This change proved particularly pronounced in grocery, personal care, and household products where brand premiums faced intense scrutiny.

Trading down patterns emerged clearly in discretionary categories. Consumers delayed major purchases, extended replacement cycles for durable goods, and shifted toward smaller pack sizes and budget-friendly alternatives.

Experience Spending Rebounds: A Tale of Diverging Consumers

Experience-based spending rebounded strongly despite economic pressures, with consumers prioritizing travel, dining, and entertainment after years of restricted access. This spending came partly at the expense of goods purchases, reflecting a values realignment toward memorable experiences and social connection.

Value vs. Luxury: The Rise of a Divided Consumer Market

The rise of the “cash-strapped consumer” created a split in retail performance. Discount and value-oriented retailers gained market share, capturing households constrained by tighter budgets. Meanwhile, premium and luxury segments also performed well, catering to affluent consumers relatively insulated from economic pressures. Middle-market retailers faced the greatest challenges, squeezed between value-conscious shoppers and high-end buyers, highlighting the uneven impact of economic pressures across the retail spectrum.

According to international energy investment data, global energy investment reached a record $3.3 trillion in 2025, with $2.2 trillion representing 67% of total spending directed toward clean energy. This marked the 10th consecutive year that clean energy investment surpassed fossil fuel spending, solidifying a structural shift in capital allocation.

Electric vehicle and charging infrastructure investment totalled $245 billion in 2025, growing 15%, down from 28% in 2024. This 13-percentage point deceleration reflected market maturation in leading regions, particularly China and Europe where EV penetration exceeded 25% of new sales.

Chart 3.2 tracks global electric vehicle (EV) sales between 2024 and 2025, highlighting both overall growth and regional market dynamics. EV sales continued to rise, reflecting expanding consumer adoption, government incentives, and investments in charging infrastructure. The chart highlights a change in investment focus from expanding production capacity to advancing technology, improving grid integration, and expanding charging networks, which will influence the future growth of EV adoption.

The sustainable products market has grown rapidly in recent years and is projected to increase from $432.67 billion in 2025 to $480.17 billion in 2026, representing a compound annual growth rate (CAGR) of 11% (The Business Research Company, 2025).

Growth did not come from consumer demand alone; it was reinforced and, in many cases, accelerated by regulation. Policies such as the EU's single-use plastics directive, extended producer responsibility programs across 47 countries, and binding corporate sustainability commitments compelled companies to transition toward recyclable and compostable materials, reshaping packaging standards across industries.

Cost remains a significant barrier to wider adoption. Sustainable packaging typically carries a 12–18% price premium compared to conventional alternatives. As a result, adoption has advanced most rapidly in markets where regulation mandates compliance or where brands can justify higher prices through strong positioning, differentiation, and consumer willingness to pay.

Sustainable packaging adoption accelerated in 2025, growing 28% to reach $412 billion and capturing 34% of the $1.21 trillion global packaging market, up five percentage points from 29% in 2024. At current growth rates, sustainable formats could account for the majority of packaging demand by 2028–2029.

Adoption varied by category. E-commerce led with a 42% sustainable share, followed by food and beverage at 38%, while consumer goods trailed at 31%. The gap reflects where sustainability is most visible and marketable: direct-to-consumer brands and food categories have leveraged clearer messaging and stronger consumer willingness to pay, while more price-sensitive segments have moved more gradually.

Survey data shows that 68% of consumers say they are willing to pay more for environmentally friendly products, up from 63% in 2024. However, actual purchasing behavior reveals a significant gap: only 31% consistently choose sustainable alternatives when prices are more than 10% higher, creating a 37-percentage-point difference between intention and action.

Income levels strongly influence this pattern. The Sustainability Purchase Index shows that consumers in the top income quartile are 2.3 times more likely to purchase sustainable products than those in the bottom quartile. Middle-income households fall in between, purchasing at about 1.6 times the baseline rate. These findings reflect practical budget constraints. Higher-income consumers are more able to absorb sustainability premiums, while middle- and lower-income households prioritize affordability, slowing broader market adoption until prices become more competitive.

Sustainable product buyers show stronger loyalty despite higher prices. Repeat purchase rates averaged 67%, compared to 44% for conventional products, giving sustainable items a 23-point advantage. Across consumer-packaged goods, these buyers generated 34% higher lifetime value.

Branded sustainable products also proved more resilient to inflation-driven moves toward private labels. While conventional brands lost 4.2 percentage points of market share to store brands in 2024–2025, sustainable branded products lost only 1.8 points, a 2.4-point defensive edge that underscores the protective value of sustainability credentials and their contribution to brand equity.