Dutch banking group ING expects the global economy to remain resilient in 2027 despite geopolitical tensions, elevated borrowing costs and political uncertainty, while forecasting lower oil and natural gas prices that could ease cost pressures on energy-intensive industries.
According to ING's global economic outlook for 2027, global goods trade is expected to increase by approximately three percent year on year, supported by artificial intelligence (AI)-related investment, energy infrastructure development and continued corporate spending on technology. However, geopolitical competition, trade protectionism and the possibility of a sharp correction in AI-related investments remain significant risks to the global economic outlook, the bank warned.
Oil and natural gas prices expected to decline in 2027
Brent crude oil prices are forecast to average $77/bbl in 2027, compared with $90/bbl in 2026, as recovering production in the Persian Gulf and a growing supply surplus put downward pressure on prices. The forecast assumes that tensions between the US and Iran will continue intermittently without causing prolonged disruptions to global oil supplies.
European natural gas prices are also projected to decline from an average of €60/MWh in 2026 to €48/MWh in 2027. Dutch TTF natural gas prices could fall below €40/MWh by the end of 2027 if LNG supplies from the Persian Gulf normalize, additional US and Qatari production capacity becomes available and demand remains subdued, according to ING. Elevated natural gas prices have already weakened industrial demand and encouraged some consumers to switch from gas to coal, the bank noted.
Eurozone growth to improve moderately, Germany supported by fiscal stimulus
Eurozone GDP growth is expected to accelerate from one percent in 2026 to 1.2 percent in 2027, supported by lower energy prices, technology-related investments and increased government spending. However, weak household consumption, elevated financing costs and subdued residential construction activity are expected to limit the recovery. Inflation in the eurozone is forecast to decline from 3.2 percent in 2026 to 2.5 percent in 2027. The European Central Bank (ECB) is expected to raise interest rates once more in December 2026 before maintaining them at broadly unchanged levels for most of 2027, with a possible reduction toward the end of the year.
Germany's economy is projected to expand by 1.1 percent in 2027, benefiting from government spending on defense and infrastructure. Nevertheless, the strength of the country's recovery will depend on structural reforms, reduced bureaucracy and taxes, and the development of a long-term strategy to ensure affordable energy supplies, ING emphasized. France and Italy are expected to record GDP growth of 0.5 percent and 0.6 percent, respectively. The report also identifies the possibility of further delays to European climate policies, including the second EU Emissions Trading System (ETS2), as a risk scenario. Postponing ETS2 could temporarily ease cost pressures on industry and reduce inflation in 2028, according to ING.
US economic growth to remain stable, while China's expansion slows
US GDP growth is forecast at 2.3 percent in 2027, slightly below the 2.4 percent expected for 2026. Technology-related capital expenditure and spending by higher-income consumers are expected to support economic activity. However, manufacturing performance remains uneven, with advanced manufacturing and AI-related investment outperforming labor-intensive industries, the bank noted. US inflation is projected to decline from 3.5 percent in 2026 to 2.4 percent in 2027, while the Federal Reserve's benchmark interest rate is expected to end 2027 at four percent.
China's GDP growth is forecast to ease from 4.6 percent in 2026 to 4.5 percent in 2027. The country's economic performance will continue to be supported by exports and technology investments, while weak domestic consumption, difficulties in the property sector and increasing trade protectionism are expected to constrain growth. Its policy priorities under the 15th Five-Year Plan will include industrial upgrading, technological self-reliance, stronger domestic demand and green development, according to ING. Measures aimed at reducing destructive price competition and encouraging industrial consolidation are also expected to contribute to easing deflationary pressures.
India and Turkey expected to maintain relatively strong growth
India's GDP growth is forecast at 6.7 percent in 2027, compared with 7.6 percent in 2026, supported by structural reforms, infrastructure investment and resilient services exports. Developing Asian economies are expected to continue performing relatively strongly, although growth in some developed Asian markets may moderate as AI-related investment slows.
For Turkey, GDP growth is forecast to accelerate from 2.8 percent in 2026 to 4.5 percent in 2027. The country's economic expansion is expected to strengthen throughout the year, with annual GDP growth reaching 5.8 percent in the fourth quarter. Meanwhile, Turkey's average inflation is projected to decline from 30.9 percent in 2026 to 26.0 percent in 2027 and 22.4 percent in 2028.
Trade tensions and energy market disruptions remain major risks
Global goods trade is expected to grow by approximately three percent in 2027, with AI-related infrastructure investments supporting trade flows, particularly in Asia. Selective economic decoupling between the US and China could benefit third countries attracting redirected production and investment, the bank noted. However, strategic competition is increasingly shifting from tariffs toward control over technology, industrial production capacity and foreign-owned assets, ING warned. A potential escalation of trade tensions between the EU and China, including tariffs of up to 50 percent on vehicles, chemicals, machinery and electronics, is identified as a major downside risk rather than the bank's base-case expectation.
The report also highlights the possibility of renewed energy-driven inflation, extreme weather events, infrastructure disruptions and further bond-market volatility. Under an adverse inflation scenario, Brent crude oil prices could exceed $130/bbl, potentially forcing central banks to adopt more restrictive monetary policies. Conversely, geopolitical de-escalation in Ukraine and the Middle East could lead to sharper declines in oil and European natural gas prices, allowing inflation to fall more rapidly and creating room for earlier interest rate cuts.
