Advanced economies: From one example of resilience to another

BNP Paribas Team BNP Paribas

History tends to repeat itself in advanced economies. Once again, growth ultimately fell short of expectations by only a small margin in the first half of 2026, despite the conflict in Iran. As early as 2025, the impact of tariffs was less severe than feared. This is a sign that structural factors (notably AI, defence and electrification) are underpinning growth in these countries and are expected to continue to do so in 2027. However, there are significant risks to the economic outlook, primarily of a geopolitical nature, with a significant upside risk to inflation and interest rates. The other instance of history repeating itself concerns a period that those under 20 cannot have experienced: the period leading up to the 2008 crisis, echoes of which can be seen in terms of growth, inflation, the direction of monetary policy, and long-term interest rates.

Advanced economies are experiencing trends similar to those they faced nearly 20 years ago:

Growth remains resilient in 2025-26 despite shocks, as it did in 2006-07, in the major advanced economies.
Inflation is above central banks’ targets: as in 2006-07, this calls for a tightening of monetary policy.
In Europe and the United States, long-term interest rates have returned to their 2006-07 levels (1996 in Japan): a challenging environment for public finances in a context where public debt ratios are significantly higher than those seen 20 years ago.

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BNP Paribas Team

BNP Paribas

BNP Paribas Economic Research Department is a worldwide function, part of Corporate and Investment Banking, at the service of both the Bank and its customers.

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