Aberdeen says resilient global economy faces growth risks

Binaya Dahal

Journalist

15 July 2026

Global economy growth remains above-trend, but geopolitical tensions, inflation volatility and other late-cycle dynamics are making the outlook increasingly uncertain, according to Aberdeen Investments.

In its latest quarterly ‘House View’, the specialist asset manager said it expects the economy to rise by around 3.2% this year but cautioned investors are entering a more complex phase of the cycle, where recurring supply-side shocks and elevated inflation risks are likely to test market.

“The global economy continues to show resilience, supported by strong corporate earnings and the ongoing AI investment cycle,” Peter Branner, chief investment officer at Aberdeen Investment, said.

“However, we are clearly in a more complex phase of the cycle, where geopolitical risks remain elevated and inflation shocks are more frequent.

“Our base case scenario assumes a stabilisation in oil markets and continued economic expansion, but tail risks remain material. Investors should therefore remain constructive on risk assets, while maintaining diversification and resilience in portfolios.”

The firm expects inflation to remain higher than it had previously anticipated because of lingering effects from the recent energy shock, although underlying price pressures are expected to moderate.

Chief economist Paul Diggle said while the energy shock stemmed from war in Middle East is proving temporary, future supply-side shocks may become more frequent.

“The global economy has entered a regime of higher inflation volatility, driven in part by geopolitics and disruptions to supply chains,” he said.

“This raises the probability of environments where equities and bonds move together, reinforcing the importance of diversification across other asset classes and regions.”

The assessment has prompted Aberdeen to temper its conviction across some asset classes.

The firm has maintained a favourable view in emerging markets, infrastructure and real estate.

However, it has downgraded its outlook on the US dollar, saying gradual diversification away from the currency, including increased gold purchases by central banks, could become a structural headwind for it in the long run.

The manager retained a neutral stance on private credit, citing concerns over underwriting standards, liquidity and growing signs of stress in parts of the direct lending market.