Global Economics Intelligence executive summary, January 2026
Global Economics Intelligence executive summary, January 2026
https://www.mckinsey.com/capabilities/strategy-and-corporate-finance/our-insights/global-economics-intelligence
By
with
with
Overall global economic sentiment is improving, with businesses more positive about future growth in line with the IMF’s upward growth revisions; several central banks cut interest rates in December.
After a year dominated by concerns over trade and global turbulence, businesses are entering 2026 with more optimism—despite continued uncertainty. Indeed, business sentiment was more buoyant in the final quarter of 2025 than in previous quarters, according to the recent McKinsey Global Survey on economic conditions.
Executives were more upbeat about future economic expectations than they had been in previous 2025 surveys, with respondents expressing the brightest near-term expectations of the year—this in comparison with three previous quarters of largely negative assessments of current global economic and trade conditions. Moreover, for the first time in 2025, the survey recorded more respondents predicting improvement over the following six months versus those expecting worsening conditions.
Notably, survey respondents no longer see changes in trade policy as the foremost disruptor of business, although this remains a significant concern. Instead, they point to geopolitical instability as the principal risk. Investment in AI and gen AI continues to be the most reported high priority for business leaders to address, particularly in technology, media, and telecommunications and in service industries.
There is further optimism in the IMF’s January 2026 World Economic Outlook update: The IMF is projecting global growth at 3.3% for 2026 and 3.2% for the following year, a slight upward revision from the October 2025 update. It says that technology investment, fiscal and monetary support, accommodative financial conditions, and private sector adaptability have helped to offset trade policy shifts. At the same time, it warns that policymakers should restore fiscal buffers, preserve price and financial stability, reduce uncertainty, and implement structural reforms.
Looking back on 2025, we see that the year was one of mixed fortunes for economies around the world. The US economy grew strongly in 2025, with real GDP accelerating through midyear on higher consumer spending and exports. GDP for the third quarter of 2025 rose by 4.3% (annual rate) versus 3.8% in the second quarter. The real GDP increase reflected higher consumer spending, exports, and government expenditure that were partly offset by a decrease in investment. Meanwhile, the Chinese economy grew by approximately 5.0% in 2025, and India expanded by some 6.5% on an annual basis on the back of resilient services activity and domestic demand. By contrast, eurozone growth is expected to be 1.4% in 2025, while UK real GDP expanded in November, driven primarily by a rebound in production sectors, but remains modest.
In the US, consumer sentiment is trending down, dropping to 89.1 in December from November’s revised figure of 92.9. Nevertheless, November’s retail and food services sales (adjusted for seasonal variation and holiday and trading-day differences) were $735.9 billion, up 0.6% from October’s revised $731.4 billion. Overall, retail sales continue to grow across most countries, with some acceleration observed in November and December due to the holiday season.
Against this backdrop, central banks have been cutting interest rates to stimulate their economy, where they feel they have room for maneuver. Although central banks in Brazil, China, and the eurozone refrained from cutting rates, other major central banks delivered 25-basis-point cuts in December.
Looking at prices, we see that inflation across developed economies remained broadly stable in December. Among the emerging economies, inflation in India and China picked up from near zero, while in Brazil and Russia, it continued to decelerate. Overall inflation expectations have been oscillating around 2.2%.
In the US, in December, median inflation expectations increased at the one-year-ahead horizon, to 3.4% (from 3.2%), but remained steady at the three-year-ahead and five-year-ahead horizons, both at 3.0%. The consumer price index (CPI) increased 2.7% year over year in December—the same pace as November—while core inflation was slightly up, to 2.6% (annualized). Among other developed economies, eurozone inflation is lower, with the headline figure projected to decrease from 2.1% in 2025 to 1.9% in 2026 and 1.8% in 2027, before rising to 2.0% in 2028, mainly owing to energy inflation. Meanwhile, UK CPI ticked up to 3.2% in December, while core inflation was slightly higher at 3.3%, indicating that underlying pressures have moderated from post-pandemic peaks but are not yet fully contained.
Among the emerging economies, the picture is also mixed. In China and India, inflation is low or negative. Consumer prices in China continued their recovery to 0.8% in December (0.7% in November), while core CPI was unchanged at 1.2%. Deflation in producer prices continued to ease slightly to –1.9% in December, from –2.2% in November. In India, CPI inflation was recorded at 1.33% year on year in December 2025 (provisional), while food inflation remained in contraction at –2.71% year on year. However, it’s a different story in Russia, where tight monetary policy is still required to achieve the Central Bank of Russia’s inflation target of 4%. Recently, inflation has slowed to 7% in November and 6% in December but a rise in VAT and regulated prices for municipal services will create upward pressure and has already started to boost expectations. In Brazil, inflation is more modest, touching 4.26% in December (versus 4.46% in November) and coming in below the central bank’s upper target limit of 4.50% for a second consecutive month. Mexico’s annual inflation declined to 3.7% in December, down from 3.8% in November, reinforcing the ongoing disinflationary trend.
On the commodities markets, gold exceeded $5,000 per ounce—a level never seen before—before cooling somewhat. At the same time, oil prices have eased as supply increased and demand remained broadly stable, with only modest growth expected in 2026. Food prices have also eased, driven mainly by dairy prices, which declined on seasonal increases in cream and milk availability.
Both manufacturing and services indicators ended the year on a weaker note, as growth rates of new orders and output eased. Manufacturing sectors around the world are either contracting or slowing down; companies do not see growth in new orders or employment, while stocks of purchases are declining. In parallel, services growth eased across most countries at the end of 2025. However, companies remain positive about 2026.
The US industrial production index decreased slightly to 102.3 in December. Similarly, S&P’s Manufacturing PMI fell to 51.8 in December 2025 (52.2 in November), the lowest in five months. However, in the eurozone, despite a marginal decline in the Economic Sentiment Indicator and the composite PMI at the end of 2025, the industrial production index is gradually improving. In India, business surveys pointed to continued expansion but moderating momentum as 2025 ended. The HSBC India Manufacturing PMI eased from 56.6 in November to 55.0 in December (still comfortably in expansion), indicating growth but at a slower pace amid competitive pressures and softer sales in some categories. In Brazil, manufacturing production has dropped: The monthly Industrial Production Index (IPI) decreased from 113.04 in October to 103.4 in November (although still above the neutral 100 line). The Mexico Manufacturing PMI fell from 47.3 in November to 46.1 in December, signaling a further deterioration in operating conditions.
On the services front, the US services PMI edged down to 52.5 (54.1 in November). Services activity in India also cooled but remained strong: The HSBC India Services PMI was at an 11-month low of 58.0 in December (down from November’s 59.8) as new business growth softened, while export demand held up better. Brazil’s Monthly Services Survey (PMS) revenue index slid slightly to 127.7 in November from 128.7 in October (staying above the neutral 100 line). This was mirrored in the volume index, which declined to 111.1 (from 112.8).
US total nonfarm payroll employment increased in December (+50,000) but has shown little change since April. The unemployment rate remained at 4.4%. Across the pond, the number of paid employees in the UK has been trending lower since 2024, while unemployment has remained broadly stable at 5.1%, with a renewed rise among workers aged over 50. In China, the overall surveyed urban unemployment rate stuck at 5.1% for a third consecutive month. The youth unemployment rate eased slightly to 16.5% in December (16.9% in November). Labor market conditions displayed mixed signals in Mexico. The unemployment rate rose to 2.7% in November, up from 2.6% in October. At the same time, formal employment reached a record high, with 22.8 million registered jobs in November.
Equity markets globally started 2026 on a strong note, with indexes rising and reaching record highs in most economies. The cost of capital moved sideways in January.
Export growth strengthened across most major economies through October 2025, while import growth was mixed over this period. Total seaborne volumes softened into November, while container throughput cooled after midyear strength. Logistics conditions remained broadly normal in November, with a modest uptick in global supply chain stress in December. Inbound spot freight rates also ticked up in December but remained well below mid-2025 highs. Outbound freight rates to Shanghai eased after June’s spike and stabilized into year-end.
In the US, the monthly deficit fell by 39.0% to $29.4 billion in October. Exports reached $302.0 billion, $7.8 billion more than in September, while October imports reached $331.4 billion, $11.0 billion less than in September. In China, cross-border trade (imports and exports) experienced a year-on-year growth rate of 6.2% in December, a rebound from the 4.3% increase seen the previous month. Export growth accelerated to 6.6% in December, from 5.9% in November, while imports also witnessed a recovery to 5.7% from November’s 1.9%. Mexico posted a trade surplus of US $663 million in November, as imports declined slightly more than exports, resulting in a positive balance despite a broad monthly contraction in trade flows.
A bold new book from the McKinsey Global Institute supports an optimistic view of progress and economic development over the coming decades. A Century of Plenty: A Story of Progress for Generations to Come (McKinsey Global Institute, January 2026) imagines a world in which every person enjoys at least Switzerland’s standards of living today—a hypothesis that the authors stress tested and concluded is physically possible.
In the advanced economies, the Fed and Bank of England both cut rates by 25 basis points in December; eurozone GDP delivers upside surprise.
United States. The Federal Reserve announced in December that it had lowered the target range for the federal funds rate by 25 basis points, to 3.5–3.75%. The Federal Open Market Committee seeks to achieve maximum employment and inflation at the rate of 2% over the longer run.
51.8
Manufacturing PMI
Level / December
2.3%
Real GDP growth
y-o-y / Q3 2025
2.7%
Consumer inflation
y-o-y / December
Eurozone. Eurozone GDP delivered an upside surprise in the third quarter by growing at 0.3% quarter over quarter—0.0% was the expectation in September. The economy has been resilient, mainly reflecting stronger consumption and investment.
United Kingdom. The consumer price index (CPI) ticked up to 3.2% in December, while core inflation was slightly higher at 3.3%, indicating that underlying pressures have moderated from postpandemic peaks but are not yet fully contained. Against this backdrop, the Bank of England cut its policy rate by 25 basis points to 3.75% in December, citing progress on disinflation and weaker activity indicators, while emphasizing that future easing would be gradual and dependent on further cooling in wages and services prices.
In emerging economies, mixed signals from China’s economic activities; December sees India’s RBI cut repo rate by 25 basis points in December and Russia’s CBR reduce rate by 50 basis points to 16%.
China. In December, cross-border trade (imports and exports) experienced a year-on-year growth rate of 6.2%, a rebound from the 4.3% increase seen the previous month. Specifically, export growth accelerated to 6.6% in December, from 5.9% in November.
0.8%
Consumer inflation
y-o-y / December
4.5%
Real GDP growth
y-o-y / Q4 2025
50.1%
Manufacturing PMI
Level / December
India. Sustained growth momentum and a relatively benign inflation environment leave India well positioned to overtake Japan and become the world’s fourth-largest economy in terms of nominal GDP.
Brazil. On January 17, a significant free trade agreement between Mercosur and the European Union was signed. According to Brazil’s president, Luiz Inácio Lula da Silva, the “agreement goes beyond the economic dimension,” and is considered positive for international relations generally. However, on January 21, the EU parliament voted to send the deal to the bloc’s top court before being ratified.
Russia. Growth forecasts for 2026 are modest, at around 1%, with major downside risks. However, a combination of tighter sanctions and policy mix may tip the economy into recession. Resilient consumption will likely be the main growth driver in 2026, supported by rapid wage growth. On the downside, export volumes will suffer from sanctions.
Mexico. Annual inflation declined to 3.7% in December, down from 3.8% in November, reinforcing the ongoing disinflationary trend. In response to softer economic conditions and easing price pressures, the Bank of Mexico cut its policy rate by 25 basis points to 7% in December.
McKinsey’s Global Economics Intelligence (GEI) provides macroeconomic data and analysis of the world economy. Each monthly release includes an executive summary on global critical trends and risks, as well as focused insights on the latest national and regional developments. View the full report for January 2026 here. Detailed visualized data for the global economy, with focused reports on selected individual economies, are also provided as PDF downloads on McKinsey.com. The reports are available free to email subscribers and through the McKinsey Insights app. To add a name to our subscriber list, click here. GEI is a joint project of McKinsey’s Strategy & Corporate Finance Practice and the McKinsey Global Institute.
Starwood Hotels' 'selective' growth plan for its 1 Hotels, Treehouse and Baccarat brands
CEO says company plans four to five openings a year
Starwood Hotels opened several properties in 2025, including the 1 Hotel Copenhagen. (Mikkel Vang)
https://www.costar.com/article/1826354535/starwood-hotels-selective-growth-plan-for-its-1-hotels-treehouse-and-baccarat-brands?
By Bryan Wroten
LOS ANGELES — Though the company's name changed nearly a year ago, Starwood Hotels still has the same mission.
“The objective was to send a signal to the world that it’s back,” Starwood Hotels President and CEO Raul Leal said in an interview about the March 2025 rebranding of SH Hotels & Resorts. “It’s not the same Starwood, but it’s certainly a platform for growth.”
The growth will be intentional, focused on unique legacy assets with the company’s three brands: 1 Hotels, Treehouse Hotels and Baccarat Hotels. Leal said it's possible Starwood Hotels will add another brand along the way and continue to scale as it expands across the world in premier locations.
Intentional growth requires finding the right partners, the right locations and what happens with the cost of money in the future, he said.
“It's easy to build or acquire a lot of hotels when the cost of capital is cheap,” he said. “Anybody can do it at that point, but that's not our objective."
The goal is to build a relevant hotel that is a good partner to all the communities that Starwood Hotels is in, Leal said. That follows the ethos of 1 Hotels, which is to do all the good one can.
"It's a bit of our guiding principle across the three brands," he said.
Scale isn’t necessary to be recognizable, Leal said. It’s about relevance, and Starwood Hotels will be more relevant through its properties and the unique experiences they offer. Baccarat Hotels is the ultra-luxury hotel brand while 1 Hotels is its fast-growing eco-brand and Treehouse is a lighter, “cheekier” version of 1 Hotels.
Starwood Hotels' internal model is about improving the planet one hotel at a time through all of its brands, not just 1 Hotels, he said. They are unique assets that cater to today’s generational lifestyle nuances. There are perspectives on new money and old money, but to some degree, these types of guests want the same thing.
“They want very high-level service and comfort, but they also want hotels that are active and programmed and have wellness components to them, so a lot more choices,” he said. “I think that's how we separate ourselves. We program our hotels heavily, probably way more than anybody in our competitive set.”
Portfolio update
Last year, Starwood Hotels opened the Treehouse Hotel Manchester in the United Kingdom; the Treehouse Hotel Silicon Valley in Sunnyvale, California; the 1 Hotel Seattle; the 1 Hotel Melbourne; and the 1 Hotel Copenhagen, Leal said. This year, the company plans to open the 1 Hotel Tokyo in March, the 1 Hotel Austin in August and a Treehouse Hotel in Adelaide, Australia, in October. If the company can hit certain construction targets, it will open the Baccarat Hotel Rome in December.
Starwood Hotels is also active in the Middle East, he said. It has several projects in the works there, specifically three in Riyadh and in Dubai. The company recently announced the Baccarat Residences Saadiyat as well.
“On the average, we’re going to do four to five a year,” he said, adding that 2028 is shaping up to have eight hotel openings. In total, Starwood has 45 hotels in operation and in progress.
Starwood isn’t building hotels for the sake of building them, Leal said. At the end of the day, they have to be profitable ventures. Market dynamics and whether the location endears itself to one of the brands matter, of course, but the biggest issue becomes the basis of construction.
“In some cases, we’re seeing some softening on the basis of existing hotels that can be converted,” he said. “In some cases, we’re seeing a little bit of a softening of people that want to get out of these assets. Then the real issue becomes the cost of construction, the development timeline and also sometimes various hiccups.”
Developing new hotels means weighing all the factors to make sure the returns are reasonable, he said. There must be an analysis to show that even if something goes wrong, the returns are still healthy.
“Selective, intentional ... not jumping at anything that doesn't make sense for the brand,” he said.
Starwood Hotels recently reviewed a branded hotel and decided the numbers wouldn’t work even with the high average daily rates the company's portfolio has been achieving, he said. The construction costs and length of renovation weren’t going to work.
Residences play a part in the development decision, Leal said. Some of the more higher-end projects and locations have enough space to build residential units, and that’s helpful especially for the Baccarat and 1 Hotels brands. The first Baccarat residential project had a price per square foot of about $4,000.
Adding residential units to a new development project is sometimes a necessity, he said. In some markets, the cost of construction and operations means something more is needed.
“You’ve got to be able to make sure you’re going to be able to actually hit that rate that you’re targeting,” he said.
People and technology
Culture is king at Starwood, Leal said. In the hotel business, that’s what it’s all about.
“We think that culture is the engine that drives profit,” he said.
The employee-as-consumer experience is just as important as the regular consumer experience, he said. As a result, Starwood goes to great lengths to make sure it’s hiring the right people for the hotels as well as providing them with skills so they can operate in this environment. Overall turnover has been low.
“I think a company that always has your best interest in mind like that is never going to have a hard time attracting good people,” he said. “As long as we lead with culture and we are continuing to do what we’re doing, we’ll grow within the company.”
Artificial intelligence is a good tool to analyze processes and friction that the standard operating procedures in the industry have had for decades, Leal said. It will help hoteliers understand how to get solutions and free up more time by getting quicker answers to things that people have to dig for. It can answer questions about how to do things better and how to connect better, giving people more time to be more human.
In the beginning, it’s about eliminating that friction on the operating side, he said. On the sales and marketing side, it's critical in providing the data necessary to prepare campaigns more effectively.
“I think it's got all kinds of applications that we're certainly feeding into and have a path that we're on,” he said. “It's going to continue to get better. I just think about being more human, not less, so our perspective is not the elimination of bodies. It's getting the most out of the bodies that we have through AI.”
Ashford Hospitality seeks to offload another 18 hotels
REIT agrees to sell two Florida hotels, one in New Mexico
The Hilton St. Petersburg Bayfront hotel, seen here, is expected to sell in coming weeks for $96 million. The hotel sale is part of a larger initiative by Ashford Hospitality Trust to trim down its real estate portfolio. (CoStar)
https://www.costar.com/article/1425134656/ashford-hospitality-seeks-to-offload-another-18-hotels?
Ashford Hospitality Trust, a real estate investment firm with 68 U.S. hotels in its portfolio, is seeking to offload even more of its lodging properties as it keeps trying to deleverage its balance sheet.
The Dallas-based REIT agreed to sell three of its hotels — La Posada de Santa Fe Resort & Spa for $57.5 million, the Hilton St. Petersburg Bayfront hotel for $96 million and the Embassy Suites Palm Beach Gardens hotel for $41 million. The Santa Fe and St. Petersburg properties are expected to close in coming weeks, said Stephen Zsigray, president and CEO of Ashford Hospitality, in a call discussing the company’s fourth quarter 2025 and fiscal 2025 financial performance.
“Opportunistic dispositions will remain a core component of our strategy in 2026 as we believe there are several additional assets in the portfolio that can yield similarly positive impact on leverage, cash flow after debt service and future capital expenditures,” Zsigray said during the call with investors.
“While we may not ultimately transact on all of them, we are currently marketing or negotiating off-market transactions on 18 additional hotels,” he added.
In the past year, Ashford Hospitality has sold six hotels with sales proceeds totaling $145 million. The deals also eliminated nearly $50 million in expected capital expenditures. The hotels were the Hilton Houston Clear Lake, The Residence Inn in Evansville, The Residence Inn in Sorrento Mesa, the Le Pavillon Hotel in New Orleans, the Embassy Suites in Houston and the Embassy Suites in Austin.
Ashford Hospitality’s decision to sell more of its U.S. hotels comes as the REIT reported a net loss of $78.3 million in the fourth quarter, as well as a net loss for the full fiscal year of $215 million. The losses are tied to ongoing lodging industry pressures, Zsigray told investors, including negative revenue per available room, substantial reductions of government spending, elevated interest rates and more demands for capital expenditures.
The REIT plans to keep carrying out the planned sales or transfers of properties to strengthen its capital structure, he said. In addition to selling off some of its hotels, Zsigray told investors that the company defaulted on its $325 million JPM8 mortgage loan secured by eight hotels.
“While we have engaged a special servicer and will continue to work towards a favorable resolution, disposition of these assets for the balance of the debt would represent a 6.2% trailing cap rate and would yield many of the same benefits for the portfolio as our ongoing sales efforts in terms of cash flow improvement and future capex savings,” Zsigray said.
The REIT did not take analyst questions during the earnings call. Ashford Hospitality did not immediately disclose to CoStar News the details behind the loan default or the names of the 18 hotels the REIT is seeking to sell.
Meanwhile, operations have also taken a hit. Government room night declined 27.9% during the fourth quarter compared with the prior year’s fourth quarter, the REIT said.
The Washington, D.C., market represents over 14% of Ashford Hospitality’s total key count, said Christopher Nixon, a senior vice president and head of asset management for the REIT, adding that the government shutdown had an outsized impact on its business.
In addition, results were comparing the fourth quarter of 2025 against the quarter in 2024 in which there was a presidential election, the executive added.
The closure of the Austin convention center also hit Ashford’s group and convention business, Nixon said.
This year, he said, he’s expecting a “robust pipeline of event-driven opportunities” including the Super Bowl in Santa Clara, California, and the 2026 FIFA World Cup, with 42% of its portfolio room count located within World Cup markets.
Zsigray remained optimistic while letting investors know liquidity would remain constrained as the REIT executes its plan to turn around the business. Focusing on performance and strategically selling property will “result in a leaner, stronger portfolio” positioning the REIT for growth, he said.
DUHC&S | Strategic Hospitality Consulting & Advisory
We transform hospitality and tourism businesses through strategic solutions, operational efficiency, and comprehensive renovation. With over 40 years of experience working with brands like Hilton, Hyatt, Sheraton, and Sonesta, we enhance asset value and profitability through:
*Operational excellence and brand standards (GSI +90%)
*Market penetration and commercial strategies
*Key partnerships and disruptive innovation
*Hotel openings and repositioning
Proven results :
✅ 48% GOP |
✅ +120% asset valuation growth
✅ Successful projects across 6 Latin American countries
🔹 Let's connect :
📩 Email: diurugeles@gmail.com
🎥 YouTube:https://www.youtube.com/@DUHC-S
Instagram: https://www.instagram.com/diur_2000/
https://viajes-noticias-duhospitality.blogspot.com
https://viajes-duhospitality.blogspot.com
https://travel-duhospitality.blogspot.com
Disclaimer
DUHC&S shares this information for educational and informational purposes only. The news articles reproduced here are sourced from public and recognized media outlets. We are not the original authors of this content but rather distributors of it. All credits go to the original sources cited in each article. If you are the legitimate owner of any material and wish to have it modified or removed, please contact us immediately at diurugeles@gmail.com, and we will address your request promptly.
Comments
Post a Comment