First Abu Dhabi Bank (FAB) reported that 2026 marks a decisive shift in how capital must be allocated as growth diverges, policy recalibrates and global risk dynamics reset, according to its Global Investment Outlook 2026, titled “Shifting Currents: Recalibrating Capital Amid a Changing Global Economic Order.”

Global economic growth in 2026 is expected to be modest and uneven, with advanced economies expanding at approximately 1.5 percent, while emerging markets, particularly the GCC and Egypt, are expected to outperform, recording growth rates above 4 percent.

The UAE is forecast to lead regional performance, with real GDP growth projected at around 5.6 percent, supported by diversification initiatives, structural reforms, and sustained investment activity, the report said.

The report assessed a global environment marked by economic transition, slower and more uneven monetary policy easing, shifting capital flows, and rising geopolitical and technological complexity.

Against this backdrop, the Outlook highlighted the need for a recalibration of capital and portfolio positioning, identified the GCC as a relative growth and stability anchor, and provided a disciplined framework for navigating risk while capturing long-term investment opportunities across asset classes and regions.

From a global perspective, 2026 is expected to be characterised by measured and cautious monetary policy. While inflationary pressures have eased from recent peaks, they remain a key risk amid heightened geopolitical uncertainty and ongoing supply-side constraints.

The report highlighted that rate cuts in the United States are expected to proceed at a slower pace than in 2025, as inflation remains the primary macroeconomic risk alongside elevated and unsettled geopolitical tensions.

Technological transformation — particularly the rise of artificial intelligence, automation, and digital platforms — is accelerating structural shifts across wealth and asset management.

The report also highlighted the global macro-outlook for 2026, which portrays a global economy that continues to expand, but not evenly. The cogs within the engines of growth are shifting, demand/supply dynamics are evolving, and the margins of safety are narrowing.

Diversification remains the cornerstone of effective portfolio construction and risk management, the report noted. In an environment defined by structural change and elevated uncertainty, diversified portfolios play a critical role in mitigating downside risk while enabling investors to capture opportunities across market cycles.

According to the report, the global economic growth is expected to remain resilient, with global GDP projected to expand by 3.1 percent in 2026, compared to 3.2 percent in 2025. At a regional level, the outlook is more constructive, with growth momentum expected to continue, supported by robust expansion in non-oil GDP and ongoing policy reforms.

The report also said that the GCC is accelerating institutionalisation, regulatory evolution and growing role in global capital allocation. It examined how asset managers across the GCC are responding to rising demand for professionally managed investment solutions, strengthened governance frameworks, and expanding product breadth.