The global economy is heading into uncharted territory, global consulting partnership Kearney’s ‘Global Economic Outlook 2025-2027’ report shows.

The report investigates the world adjusting to fragmentation, rising geopolitical tension and economic policy uncertainty, which are set to shape growth prospects over the next three years.

Key developments include US tariffs, heightened geopolitical risks and the impact of industrial policy which restrain global growth expectations to an average of about 2.5% between 2025 and 2027.

This is below estimates and prepandemic levels, which exceeded 3%.

In a notable shift, the Middle East and Africa (MEA) region is set to outpace Asia and Australasia as the fastest-growing region globally, with an average growth forecast of 3.6% through to 2027.

The MEA region plays a strategic role in global energy and commodity markets, insulating it to some degree from the impact of US trade policies, the report shows.

This regional growth momentum suggests opportunities for South Africa; however, the country needs to address energy instability, political uncertainty and policy inconsistency to fully capitalise on these regional tailwinds.

The report provides insights for South African corporates and policymakers navigating local challenges in a complex global context, underlining the need for strategic scenario planning and agility.

“Clarity on non-regret moves and the agility to take advantage of emerging opportunities becomes critically important for organisations in a volatile global operating environment,” says Kearney Africa managing partner Theo Sibiya.

Global industrial production is likely to experience a shallow recession, and sectors dependent on imported inputs, like South Africa’s automotive manufacturing, may be particularly vulnerable, the report reveals.

Conversely, global services are expected to remain more stable, offering a potential upside for South Africa’s business process outsourcing, fintech and digital services industries.

Kearney identifies five key drivers that will shape the global and regional economic trajectory through 2027 as geopolitical risk, industrial policy and tariffs, institutional stability, technological disruption and environmental degradation.

The report lays out four scenarios for how these forces could evolve, with three of the four suggesting growth outcomes below the 2.5% baseline.

Depending on how these variables interact, average global growth through 2027 could dip as low as -1.8% or climb to 2.6%.

For South Africa, the global picture is mixed but not without opportunity, the report shows.

The regional outlook for Africa remains strong, and there is a call to action for businesses to build resilience, deepen innovation and stay agile in a rapidly shifting global environment.