The global economic growth performance proved resilient in 2025, with the latest estimate for last year’s global economic growth at 3.1%. In 2026, the global economic growth is forecast to remain at 3.1%, before picking up slightly to 3.2% in 2027. Almost all major central banks moved towards monetary policy easing in 2025. In developed economies, the US Federal Reserve (Fed) delivered three rate cuts in 2025, totalling 75 bp, while the European Central Bank (ECB) cut rates four times throughout the year, totalling 100 bp. The notable exception was the Bank of Japan (BoJ), which moved in the opposite direction, amid persistent inflationary pressures.

Meanwhile, in the emerging markets, China cut rates once in 2025 as deflationary pressures continued, while India made four rate cuts as food inflation pressures eased. The Central Bank of Russia cut interest rates by a total of 500 bp in 2025 after a sharp tightening in 2023 and 2024. Brazil moved in the opposite direction, tightening through 1H25 and maintaining tight rates into 2026 (Graph 1). These lower interest rates have eased financial conditions for households and businesses and supported consumption across key oil-product sectors. Although growth remains relatively uneven, and unemployment is slightly rising in some economies, the monetary easing has helped supporting global economic growth. This supports a healthy oil demand growth forecast of 1.4 mb/d in 2026, followed by 1.3 mb/d in 2027.

Indeed, the demand growth in 2026 and 2027 will be concentrated in the non-OECD, where income growth remains resilient and recent government policy is supporting oil consumption, with oil demand growth forecast at about 1.2 mb/d for both years. As for the US dollar, the currency has proven to be resilient since the Fed delivered three cuts in 2025, and remained relatively stable ever since. It should be noted that the currency was already on a downward trajectory since the beginning of the year, falling by 10.1% between January and September 2025 (Graph 2). This decline has made dollarpriced commodities, including oil, cheaper for consumers and provided some additional support for global demand. A combination of monetary easing policies and relatively softer energy prices has not only contributed to a decline in inflationary pressures but also has given central banks greater confidence to continue rate cuts.
Source: OPEC