Global Economic Resilience 2026: Will Growth Survive the Shocks?

Global economies showed surprising resilience in the first half of 2026 despite inflation, energy price shocks, and geopolitical uncertainty. This episode examines the latest PMI data from the US, China, UK, Europe, South Africa, and Nigeria, while exploring central bank responses, growth risks and thoughts on the outlook for the second half.  We also replay clip of Ajibola Olomola, Partner KPMG Nigeria on the Nigeria economy in H1 2026.

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Transcript

This episode concludes our review of the first half of 2026 for economies all over the world. The theme of resilience is still playing out as the tough context threatens prosperity. Still a trend of stronger reform backbone and fiscal discipline has helped most economies withstand the shocks. H1 was less about tariffs as the first half saw economies contending with high inflation amid weakened confidence as an energy price shock ravaged business activity and a common trend of high prices weighed on growth. The World Bank said global growth will slow to 2.5% in 2026, citing higher energy prices, commodity-market disruptions, and the elevated uncertainty.

Today, Central banks are also trying to understand if indeed the surge in energy price has a moderately transitional or lingering, more scarring effect on inflation …and what to do about it. In Europe according to latest surveys, a near-unprecedented cooling of cost pressures reduces the chances of further rate hikes in the near future as rate setters await greater clarity on how rapidly price pressures will fade.   The first half 2026 had to deal with the fallout from the US-Iran energy shock on demand …the second half is starting with crude oil already flirting with below prewar levels  but it is still a fragile cease fire. The second half will also test the prevailing hypothesis of Artificial Intelligence as a global growth driver as more widespread application raises new issues on job loss, user acceptance and cybersecurity.

Hello and welcome to Global Business Insights, where we bring perspectives to help you navigate today’s more complex terrain. This episode concludes a review of the first half of the year.  We also look at the June PMI data for H1 - that just came out this week.

In the US, the flash June PMI rose to 52.2 from 51.5, a five-month high. Better Middle East news lifted confidence, though growth stayed below earlier-year levels. Services grew modestly as high prices and weak consumer sentiment weighed on demand, while manufacturing was supported by inventory building amid wider supply delays. Job cuts reached their highest pace since 2009, excluding the pandemic, reflecting softer demand expectations and higher raw material costs. Sustained peace in Iran could lower energy prices, ease input costs, and support stronger US activity. 

But you cannot rule out another “Black Swan Event” as we have seen in the first half of the year, that could potentially upend projections for the second half.

Still, after three months of strong hiring, the US economy added only 57,000 jobs in June, well below expectations. The weakness was most evident in leisure and hospitality, and it also makes a Federal Reserve rate hike this year less likely.

The latest China General Composite PMI eased to 53.6 in June from a three-month high of 54.0 in May. The latest reading remained among the strongest in the past three years, reflecting sustained expansion across both the manufacturing and services sectors. Input cost inflation slowed to a five-month low, suggesting easing cost pressures for businesses. The chart shows China in the first half attempting a revival albeit still looking fragile though an expansion trend has been sustained for over 12 months.

In the UK, where the attention is shifting to the politics and prospective Prime Minister Andy Burnham is promising fiscal discipline and better times … according to a flash report, The S&P Global UK Composite PMI eased to 49.4 in June of 2026 from 49.7 in May, a second month of contraction following 11 months of expansion in the private sector. The services PMI data just out confirmed a clear loss of momentum for the UK economy in q2 after a positive start to the year. UK services in June PMI dropped to 48.8, from 49.3 in May, The latest survey indicated a decline in service sector activity for the second month running and, although only modest, the rate of decline was the steepest since January 2023.

In Europe… S&P Global Eurozone Composite PMI Output Index – just out posted outside of contraction territory for the first time since March. At 50.0, the headline index was up from 48.5 in May signalling a stabilisation in output, following two months of decline. The overall stabilisation in output and slight Improvement in PMI was was due to growth in manufacturing being offset by a further albeit slower decline in services. The good news is that wider economy has stabilised after two months of falling output as we saw a drag on growth since the outbreak of the war in the Middle East led to subdued consumer demand due to the energy price spike.  In the eurozone, Input cost inflation in the service sector fell in June to the greatest extent since data were first available in 1998, barring only that seen in the COVID-19 lockdowns of early 2020. This has helped support a revival of growth of services activity in some key sectors hardest hit by the war, notably leisure and tourism.. 

The S&P South Africa PMI for April 2026 was 51.6, up from 50.8 in March 2026 - the highest reading since August 2022 …but only to drop in later months- but still remaining in expansion. In the latest June print, the private sector returned to marginal growth in June, as the reading signalled a third expansion in the past four months helped by a sharp easing of inflationary pressures. South Africa PMI recovered in June, rising to 50.5 from 49.6 in May, to indicate an expansion across the private sector for the third time in four months. There is a silver lining from the June data in the marked cooling of inflationary pressures as input prices retreated after reaching the highest levels for nearly four years in May.

In Nigeria - Since August 2025, when PMI reached 54.2, we have economic activity easing slightly but remaining in expansion, except in January 2026. June 2026 PMI fell to 53.4 from 54.1 in May, while stronger demand continued to support output and new orders. Input costs and output prices rose sharply again, though less than immediately after the Middle East conflict began.  Muyiwa Oni, Head of Equity Research West Africa at Stanbic IBTC Bank, says the data supports likely Q2:26 GDP growth of 3.94% y/y, slightly above Q1:26’s 3.89%. Nigeria’s 2026 growth is forecast at 4.1%, with risks from insecurity, renewed exchange-rate pressure, extreme weather, higher fertiliser prices, and capital inflows in H2 2026.

On Capital inflows, Nigeria’s planned return to the FTSE Russell Frontier Market Index has been paused over concerns that the new T+1 settlement rule could make investing harder. FTSE Russell says requiring payment one day after trade execution may force prefunding and raise FX risks for investors. But operators argue the review should also reflect broader reforms in infrastructure, technology, transparency, settlement efficiency, and FX access. FTSE Russell will announce its decision by the end of August; a further delay could affect admission to other major indexes and forecasted growth in portfolio inflows.

We replay (for those who did not see it) a clip of Ajibola Olomola, Partner at KPMG Nigeria, sharing his perspective on the first half of the year for the Nigerian economy, which he says is not out of the woods.  

Well that’s it on this special week end episode of global business insights as we close the first half of the year. This is Bode Ososami. Thanks for watching. Bye Bye.