Macroeconomic outlook 2026: Olivier Colsoul, Senior Strategist at AG, reviews the past year and shares his expectations for growth, inflation, monetary policy and the financial markets.
Following a year shaped by geopolitical tensions and economic uncertainty, Olivier Colsoul, Senior Strategist at AG, shares his perspective on what lies ahead for growth, inflation, monetary policy and the financial markets. How will the global economic landscape evolve in 2026? And what does this mean for investors and employers managing supplementary pension plans?
Olivier, how do you look back on 2025?
Olivier Colsoul : "The year began under significant strain, with conflicts in Ukraine and Gaza and heightened geopolitical uncertainty in the U.S. However, by the second quarter, signs of stabilisation emerged, even some improvement. The soft landing we anticipated largely materialised, despite disruptions from Donald Trump’s trade war."
How do you see the current economic situation?
"The global economy continues to grow. The composite PMI remains above 50, signalling expansion, albeit at a moderate pace. Europe shows tentative improvement, supported by commitments to boost defence spending and fiscal stimulus in Germany. The U.S. economy is more robust, driven by strong consumer demand, heavy investment in artificial intelligence, and productivity gains."
Our initial forecasts (see below) remain broadly on track, with eurozone growth likely to exceed expectations:
- Growth: Eurozone: 0.5-1.0%; U.S.: 2.25%-2.50%
- Inflation: Eurozone: 2.0-2.25%; U.S.: 2.5-3.0%
2025 was turbulent, yet resilient.
What can we expect in 2026?
"We foresee a moderate recovery. In Europe, growth should pick up slightly in the second half, supported by household consumption - helped by easing inflation - and renewed investment. In the U.S., momentum remains strong, though fiscal measures and geopolitical tensions could temporarily reignite inflation."
Our forecasts for the year ahead reflect this view.
- Growth: Eurozone: 1.25-1.50%; U.S.: 2.0%-2.50%
- Inflation: Eurozone: 1.75-2.00%; U.S.: 2.5%-3.0%
What about monetary policy? Where are we heading?
"In the U.S., inflation is likely to remain above the 2% target and fluctuate, while labour market cooling remains a concern. These dynamics support a cautious transition toward a more neutral monetary stance - already adopted by the ECB, now in stabilisation mode - and pave the way for gradual rate cuts by the Federal Reserve as conditions allow."
We foresee a moderate recovery.
What does this mean for Branch 23 returns?
"A moderately favourable economic backdrop, combined with stable or slightly more accommodative monetary policies, should continue to support financial markets. With the yield curve normalising - long-term rates again exceeding short-term rates - bond returns should stabilise. Equities, buoyed by positive earnings trends, are also expected to perform well.
In this context, diversified and sustainable funds remain essential. Our Branch 23 funds are well positioned to deliver attractive returns and long-term growth potential. Meanwhile, Branch 21 guarantees a stable return regardless of market conditions. At AG, we offer a combination of both: the security of Branch 21 with the upside potential of Branch 23. And let’s not forget: sustainable investing is no longer a trend but a necessity. It creates value for society and strengthens long-term resilience through proactive ESG risk management."
What would you say to employers about fluctuating returns in the second pillar?
"Despite a challenging backdrop, the economy has shown remarkable resilience, and financial markets have adapted quickly. Fluctuations in performance are inherent to markets but fit within a long-term strategy. Employers should prioritise a diversified investment approach aligned with their objectives. Choosing solutions that are both financially sound and socially responsible means combining performance with lasting positive impact."
Participate in the Pension & Health Academy :
Macroeconomic outlook for 2026 - cautious optimism after a volatile year
During this webinar, we will briefly review the events of 2025 and their impact on investment funds.
We will then look at the most likely economic scenarios for 2026 and their consequences for financial markets.
- Tuesday 27th January 2025 from 1PM to 2PM (French).
- Thursday 29th January 2025 from 1PM to 2 PM (Dutch).
Spekers : Olivier Colsoul, Senior Strategist AG et Eric Giegas, Asset Manager chez AG (French).
Olivier Colsoul, Senior Strategist AG et Jurgen Temmerman, Asset Manager chez AG (Dutch).