Goldman Sachs Exchanges: Outlook 2026 Episode 1: The Big Picture

Does 2026 have in store? Will the solid growth we saw in 2025 continue? What are the biggest risks, and how should investors position their portfolios? I'm Alison Nathan, and this is Goldman Sachs Exchanges. We'll dive into those questions in Outlook 2026, a special three part series covering the trends that will define the global economy in the coming year. In this episode, I'm sitting down with Anhatzius, head of Goldman Sachs Research and the firm's chief economist, and Dominic Wilson, senior adviser in the Global Markets Research Group, to discuss the economic and market outlook for the ye

Thank you. Great to be with you.

So let's get right into it. We have a lot to discuss. Yan, at the start of 2025, you predicted global growth of 2.7%, just under the figure where we estimate we will end the year. Well, we're back here again one year later, and your growth view for the global economy, again, is more optimistic than consensus. So what's driving that relatively optimistic view for 2026?

So if I just go back a year, the idea was that the tailwinds would outweigh the tariff increases. And obviously it was a lot of ups and downs during the year, but in the end, I think that was basically what happened. As we go into 2026, I think the story is a little bit clearer because the tariff issue is now in the rearview mirror. The increases in tariffs are behind us. Going forward, we'll probably go sideways to lower depending on what happens on the legal front, what happens with perhaps tariff reductions as we go into the midterms, but it's no longer negative. And then there are some pos

You're especially optimistic about US growth. So talk us through our US view in more detail.

In The US, we're at two point five percent fourth quarter to fourth quarter. And that is really driven by some of the forces I just talked about. Tariffs are no longer a drag. Maybe they're even going to turn into a small boost in terms of real income as the year progresses. We are getting tax cuts on the consumer side, strong tax refunds. We're getting fiscal help on the business side as firms can fully depreciate equipment and plants. And we're probably going to see a boost from the rate cuts that the Fed has already delivered. We expect some additional monetary easing, our financial conditi

Let me turn to Dom for a moment, bring you into the conversation. Obviously, Jan is optimistic. Do the markets share that optimism?

We think probably not fully. The markets have moved a long way since the worries in April. We were pretty quick to move through the initial shock and from tariffs and the worries about growth there. We haven't worried a lot about growth over the last few months, so the market's been in a more comfortable place. But when we benchmark the forecast specifically on US growth, and we still find that there's probably room for that market to upgrade further. The preferred method that we have looks at the joint pricing of bonds and equities. We get numbers around a little less than 2% in terms of the

Yeah. Let me pivot away from The US for a moment. We're also forecasting above consensus growth in China. You know, we know there are drags in the economy, the housing sector in particular. Consumption has been a point of weakness. But you see exports more than making up for those drags. And there's a prediction in our China forecast that China's current account surplus could soon be the biggest of any country in recorded history. So what are the implications of that for China?