Goldman Sachs Forecasts 2.8% Global Growth for 2027

2.8% Growth Hinges on Energy and AI

Goldman Sachs expects the global economy to expand 2.8% in 2027, a reading slightly above the Wall Street bank's projection for 2026, set out in its latest economic outlook. The research anchors next year's improvement to two factors: falling energy prices and continued investment in artificial intelligence. Goldman expects Brent crude to fall to $78 a barrel by the end of 2027 as Middle East supplies adjust following this year's energy shock. Cheaper fuel would feed through to pump prices and industrial input costs, easing pressure on companies and households and helping keep the expansion on track. Chief economist Jan Hatzius framed the trajectory in restrained terms, writing that the bank expects “another year of solid but unremarkable GDP growth in 2027.” The second engine is artificial intelligence. Goldman projects global AI investment rising from $1.1 trillion this year to $1.8 trillion in 2027, a step up it estimates would add 0.4 percentage points to global GDP growth. In the bank's arithmetic, that spending wave does most of the work of lifting next year's growth rate above the 2026 reading. The forecast is not built for shocks. Goldman flags a fresh escalation in the Iran war as a risk that could send oil prices higher again, undoing the energy-led relief at the center of the outlook. Europe, it warns, could keep struggling with delayed energy costs, while any slowdown in AI investment would strip out one of the main engines of global growth. The upshot is a narrow baseline: growth improves, but only if both pillars hold.

Two More Hikes Before a 2027 Cut

The bigger complication for investors sits with the Federal Reserve (Fed). In the same forecast round, Goldman now expects the US central bank to raise interest rates twice more, first in December 2026 and again in March 2027, with the first projected cut pushed out to December 2027. On that path, borrowing costs would stay elevated for most of 2027, adding pressure on companies that rely on debt and weighing on highly valued technology stocks, whose future earnings are discounted at higher rates. The bank expects US core inflation to fall from 3.2% to 2.4% by the end of 2027, the condition it sees for the Fed to finally ease policy. Until that inflation hand-off happens, the rate path, not the growth number, does the market-moving work. The timing matters for positioning. A hike in December 2026, weeks away from the publication of this outlook, would land before any of the growth benefits Goldman projects for 2027, and the March 2027 follow-up would compound the tightening through the first half of the year. Investors would therefore face the bank's improved 2027 growth picture while policy is still moving in the restrictive direction. The forecast describes Goldman's expectation, not a Fed commitment; the Federal Open Market Committee decides each move meeting by meeting. For equity investors, the outlook reduces to a single test: whether cheaper energy and ongoing AI spending can support corporate earnings while interest rates remain high. If either source of growth weakens, Goldman's already modest recovery forecast would come under serious pressure, and with it the case for owning the growth-sensitive end of the market. Readers who want the transmission mechanics in one place can work through How Interest Rates Impact Everything, a practical guide to how policy rates reach risk assets.

Tightening Into an Upturn

The picture Goldman draws is unusual: growth accelerating while the central bank is still tightening. That combination, rather than the headline 2.8% number, is what investors have to price. If the bank is right on both counts, corporate earnings would absorb higher borrowing costs even as demand improves, and rate-sensitive stores of value such as gold would trade on the policy path rather than on the growth story. The first checkpoint arrives soon. The Fed's December 2026 meeting is the opening date on Goldman's projected hiking path, and any departure from the bank's script there would force a reassessment of the entire 2027 outlook, from the oil price floor to the timing of the first cut.