Key facts
- China's GDP growth is projected to slow to 4.3% in 2027, down from 5% in 2025.
- Global GDP growth is projected to slow from 3.3% in 2025 to 3.0% in 2026, then pick up to 3.1% in 2027.
- The AI boom is supporting global economic expansion despite higher energy prices and interest rates.
- US real GDP growth is projected to slow from 2.1% last year to 2.0% in 2026 and 1.9% in 2027.
- US inflation (PCE) is projected to rise to 3.2% in Q4 2026 compared to Q4 2025.
China's economic growth is expected to slow further next year as export strength fades and weak domestic demand persists, even as the global economy remains resilient, according to a new outlook from the Peterson Institute for International Economics (PIIE).
The Washington-based think tank projects China’s GDP will grow 4.6 per cent this year and 4.3 per cent in 2027, down from 5 per cent growth in 2025, according to its semi-annual Global Economic Prospects report, released on Tuesday.
Globally, real GDP growth is projected to slow from 3.3 percent in 2025 to 3.0 percent in 2026 before picking up to 3.1 percent in 2027. This expansion is supported by the artificial intelligence (AI) boom, which is helping to cushion the effects of higher energy prices, inflation, and interest rates. However, the war in the Middle East has introduced a significant shock to energy markets, with prices remaining 30 to 40 percent above pre-war levels. If oil prices reach $150 per barrel, global growth could be 0.4 percentage points lower than projected.
In the United States, real GDP growth is projected to slow from 2.1 percent last year to 2.0 percent in 2026 and 1.9 percent in 2027. The AI boom is boosting investment and consumption, but a sharp drop in immigration is constraining labor supply. US inflation, as measured by the personal consumption expenditures price index (PCE), is projected to rise to 3.2 percent in the fourth quarter of 2026 compared with the same period of 2025, while core inflation is projected to reach 3.1 percent. Overall US inflation is expected to cool in 2027 to 2.2 percent.