‘Solid but unremarkable’: Goldman Sachs sees global GDP growth at 2.8% in 2027

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The global economy is expected to maintain steady growth in 2027, supported by declining energy prices and continued investment in artificial intelligence (AI), although geopolitical tensions, fiscal pressures and uncertainty over technology spending could pose risks, according to a research report by Goldman Sachs.Global gross domestic product (GDP) is projected to expand by 2.8% in 2027, compared with an estimated 2.7% in 2026, said Jan Hatzius, chief economist and head of Goldman Sachs Research.The United States, Japan and the United Kingdom are expected to outperform consensus growth estimates, while South Korea and Taiwan are projected to benefit from continued strength in AI-related exports.“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,” Hatzius said.

Lower energy prices and AI spending to support growth

A key factor behind the improved outlook is the expected moderation in energy prices. Goldman Sachs' commodity strategists expect Brent crude to fall to $78 per barrel by the end of 2027 as supply conditions in the Middle East normalise.The report said lower energy prices were expected to shift from being a drag on economic activity to providing modest support for global growth.AI investment is also expected to remain a significant contributor.

Global nominal investment in AI is projected to rise to $1.8 trillion in 2027 from $1.1 trillion in 2026, driven largely by higher spending on hardware in the US.Goldman Sachs estimates that AI investment will add 0.4 percentage points to global GDP growth in 2027, with its contribution to US economic growth projected at 0.6 percentage points.“Even with the expected slowdown, the impact on GDP growth will be sizable,” Hatzius said.The scale of financing required for the AI infrastructure expansion has also come into focus. In a separate report, Goldman Sachs estimated that AI-related debt issuance across global syndicated credit markets had reached $687 billion year-to-date as of November 3.The report said the five major technology companies known as hyperscalers — Alphabet, Amazon, Microsoft, Meta and Oracle — had issued $296 billion in debt year-to-date, exceeding the bank's full-year forecast of $250 billion.Their financing obligations extend beyond direct borrowing. Goldman Sachs estimated that the five companies had $1.7 trillion in lease commitments and another $1.9 trillion in unconditional purchase commitments, excluding leases. Of the latter, $685 billion was due by the end of 2027.The bank cautioned that these commitments represented an additional demand on companies' cash resources. It also said market saturation was emerging as a key constraint on further AI-related borrowing.

China growth outlook and risks to global economy

Among major economies, China is forecast to grow by 4.5% in 2027, slightly above the consensus estimate of 4.4%. However, weak domestic consumption and continued weakness in the property sector are expected to constrain domestic demand.

Goldman Sachs said risks to global growth remained tilted to the downside, identifying a renewed escalation in Iran, widening fiscal deficits and lower-than-expected AI capital expenditure as potential sources of pressure.Inflation is expected to moderate as energy prices decline, potentially giving central banks room to move towards monetary policy easing later in 2027.The bank's outlook therefore points to continued global expansion, with lower energy costs and AI spending providing support, while geopolitical developments, fiscal conditions and the scale of future technology investment remain important risks.