Overheating and Inflation Risk Stand Out in the Global Economy

Serdar HocamAuthor & Editor

While the global economy maintains its resilience despite geopolitical tensions and energy shocks, experts are discussing overheating and interest rates rather than recession.

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Although the global economy continues its strong growth despite wars and energy shocks, artificial intelligence investments and defense spending are supporting the economy. Experts point out that the real danger is not recession, but overheating, high inflation, interest rates, and public debts.

Surprising Resilience in the Global Economy

Despite two wars, sharp increases in energy prices, and continuous geopolitical disruptions, the expected widespread economic slowdown has not yet materialized. Strong employment data, growth revisions, and increases in corporate profits in the US demonstrate the resilience of the global economy.

Energy Shocks and Inflationary Pressure

While crude oil prices rose by nearly 50 percent in six months, natural gas prices doubled. Under normal conditions, this shock would be expected to slow down growth, but strong economic growth and supply disruptions cause inflation pressure to remain alive.

Artificial Intelligence and Infrastructure Investments

One of the most important forces supporting the global economy has been the artificial intelligence investment boom. While new demand is being created in data centers and the infrastructure ecosystem, copper prices have almost doubled in the last five years.

Growth Forecasts and Future Expectations

JPMorgan estimates that global GDP is growing at an annualized rate of about 3.1 percent. While it is seen as likely that the IMF will revise its 2026 growth forecast upward, global growth is expected to accelerate to 3.4 percent in 2027.