Source : WAM
First Abu Dhabi Bank (FAB) said 2026 will represent a pivotal shift in global capital allocation as growth paths diverge, policies adjust, and global risk dynamics evolve, according to its Global Investment Outlook 2026, titled “Shifting Currents: Recalibrating Capital Amid a Changing Global Economic Order.”
The report forecasts modest and uneven global economic growth in 2026, with advanced economies expanding by around 1.5 percent. In contrast, emerging markets particularly the GCC and Egypt are expected to outperform, with growth rates exceeding 4 percent.
The UAE is projected to lead regional growth, with real GDP expected to expand by approximately 5.6 percent, driven by economic diversification, structural reforms, and continued investment momentum.
FAB’s outlook describes a global environment shaped by economic transition, slower and less uniform monetary easing, shifting capital flows, and increasing geopolitical and technological complexity.
Against this backdrop, the report underscores the need to recalibrate capital allocation and portfolio strategies. It identifies the GCC as a relative anchor of growth and stability, while offering a disciplined framework to manage risk and capture long-term investment opportunities across asset classes and regions.
From a global standpoint, 2026 is expected to be marked by cautious and measured monetary policy. Although inflation has eased from recent highs, it remains a significant risk amid persistent geopolitical uncertainty and ongoing supply-side pressures.
The report noted that interest rate cuts in the United States are likely to proceed more slowly than in 2025, as inflation continues to pose the primary macroeconomic challenge alongside elevated geopolitical risks.
Technological transformation including advancements in artificial intelligence, automation, and digital platforms is accelerating structural changes across wealth and asset management.
FAB’s macro outlook for 2026 suggests a global economy that continues to expand, though unevenly. Growth drivers are shifting, demand and supply dynamics are evolving, and margins of safety are becoming narrower.
The report reiterated that diversification remains central to effective portfolio construction and risk management. In an environment of structural change and heightened uncertainty, diversified portfolios are essential for limiting downside risk while capturing opportunities across market cycles.
Global GDP growth is forecast to remain resilient, with output expected to rise by 3.1 percent in 2026, slightly below the 3.2 percent projected for 2025. At the regional level, the outlook is more optimistic, supported by strong non-oil GDP growth and ongoing policy reforms.
The report also highlighted the GCC’s accelerating institutional development, regulatory progress, and growing role in global capital allocation. It examined how asset managers across the region are responding to increasing demand for professionally managed investment solutions, stronger governance standards, and a broader range of investment products.
