Europe has plenty of world-class research, talent and creativity. However, too often ideas originating in Europe are turned into economic success by others, elsewhere. This is because European innovators face barriers here and find it difficult to bring their ideas to life. As a result, the Commission proposed a new European innovation act to help Europe’s most innovative ideas be developed, financed and scaled up in Europe.
To strengthen the EU innovation system, the proposal will address two main challenges. Firstly, it will help innovative companies access financing by

promoting a common EU framework to value intellectual property
creating a digital marketplace connecting buyers and sellers of intellectual property
offering expert support to help companies bring their ideas to the market

This can unlock €10.2 billion per year in additional financing and generate around €35 million in administrative cost savings.
Second, it will establish a common approach for research and development procurement that

will provide greater legal certainty
help new technologies reach the market faster
make it easier for public buyers from different EU countries to jointly carry out Research and Development procurements.

With this, companies could expect €25.92 billion in additional annual profits, while public buyers could save €1 billion per year.
The European innovation act is an element of the competitiveness compass, to strengthen the EU’s long-term competitiveness, prosperity and technological sovereignty. In parallel, the Commission will help innovators accelerate the transformation of innovative ideas into market solutions through a specific proposal on regulatory sandboxes.
 
 
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Surpluses and deficits reflect deeper choices about saving and investment across interconnected economies.
More than 80 years ago, John Maynard Keynes centered his work on the persistence of global imbalances. The great economist tried to resolve what he described as the “secular international problem” at the Bretton Woods conference in 1944 through an international clearinghouse. But the conference’s final agreement included only a weaker set of remedies.
Concern about imbalances has waxed and waned in the decades since, but has returned to the forefront of the policy debate in recent years. Global imbalances widened again in 2025, reversing steady narrowing during the decade after the global financial crisis and reviving difficult questions about their sustainability.
Keynes’s point was simple but profound: In a world of interconnected economies, countries cannot save, spend, or borrow independently. Imagine a small neighborhood. One household saves almost everything it earns. Another spends more than it earns and borrows to make up the difference. For a time, the arrangement works. The thrifty household finds a reliable borrower and earns a return while the spendthrift household enjoys a comfortable lifestyle. But as debts accumulate and positions become entrenched, what began as a mutually convenient arrangement can become fragile and fuel tensions.
Global imbalances are this story’s international version and refer to the pattern of surpluses and deficits across countries. Every country keeps a ledger with the rest of the world, called the current account. This records the value of the goods and services it sells and buys abroad as well as income flows associated with foreign transactions. When a country sells more than it buys, it runs a surplus and lends to the rest of the world. When it buys more than it sells, it has to borrow from other countries and run a deficit.
Saving and investment
At its core, a current account balance reflects a simple idea: the difference between what a country saves and what it spends. This is more than a simple accounting identity; it reflects the complex forward-looking choices of economic agents. For instance, households consume and firms invest when they expect higher income in the future or face temporary shortfalls. They save when their income exceeds their desired consumption, when investment opportunities are limited, or when they worry the economy might weaken and want to put money aside.
Exchange rates play a role, too, but it is often misunderstood. A country’s currency tends to rise or fall to keep trade broadly in line with the saving and investment balance. Exchange rates, in other words, tend to reflect current account positions rather than drive them.
Seen this way, global imbalances are not primarily about trade competitiveness. They reflect structural differences in the pattern of domestic saving and investment across countries—driven, for example, by demographics, growth prospects, financial development, and policy frameworks.
The recent increase in imbalances reflects mostly developments in the world’s two largest economies. A slump in China’s property market five years ago depressed domestic investment as construction of new homes stalled; households responded by slashing spending and saving more. In the United States, meanwhile, the government’s large fiscal deficit—coupled with robust consumer spending—has depleted national savings.
Cause for concern
Not all deficits or surpluses are a problem. They can be a natural and even desirable outcome of efficient resource allocation, if capital flows to younger fast-growing developing economies from aging advanced economies, for example. The concern arises when imbalances become excessive and are rooted in persistent distortions that pose serious risks to global economic and financial stability.
The longer deficit countries rely on external borrowing, the more vulnerable it leaves them to sharp changes in global financial conditions. If investors lose confidence or financing becomes more expensive, capital inflows can reverse suddenly. The result is often currency depreciation, financial stress, and economic recession, as occurred in Mexico in the early 1990s and East Asia later that decade.
Surplus countries do not face the same risks of correction, but their policies can have consequences for other countries that build gradually over time. When surpluses reflect weak domestic demand, underdeveloped financial systems, or policies that encourage saving, it may indicate that a country is using its resources inefficiently. Excess savings from surplus countries channeled abroad put downward pressure on global interest rates and prices.
Where surpluses stem from policies intended to strengthen export competitiveness, the disinflationary effects of cheaper exports can help trading partners struggling with high inflation—but they weigh on partners already facing weak demand, or those whose industries compete head‑to‑head with those of the surplus economy, dragging down their economic growth.
Financial markets can punish countries that run persistent deficits and correct their imbalances—by driving down the value of their currencies and driving up their borrowing costs—but countries with persistent surpluses face no comparable disciplining market forces.
At the global level, imbalances can amplify financial cycles. Large capital flows fuel credit booms and inflate asset prices in deficit countries. Surplus countries accumulate large foreign asset positions that are sensitive to exchange rates and interest rates. These dynamics can make the system more fragile.
Action on both sides
Left unchecked, global imbalances can also fuel geopolitical tensions. Factory closures, job losses, and other dislocations in communities or industries exposed to surging imports can fuel the perception that the playing field is unfair, strengthening support for trade tariffs and other protectionist measures.
So how should the world manage persistent imbalances? Countries may be tempted to reach for unilateral trade protection as a shortcut to rebalancing. But higher tariffs and other trade barriers generally have weak and unreliable effects on external balances because they do little to alter the underlying saving and investment drivers. The protectionist measures can instead trigger tit-for-tat reactions that can further disrupt the global economy.
A more balanced outcome requires action on both sides. Adjustment is never a one-country story. After all, one country’s deficit is another’s surplus, and changes in one economy’s saving and investment patterns affect outcomes elsewhere.
Deficit countries need to strengthen saving and ensure that borrowing supports productive investment. Surplus countries need to boost domestic demand or reduce excess saving. When these adjustments take place together, imbalances can narrow in a way that supports global growth.
A balanced approach like this would facilitate orderly adjustment: Saving and investment shift gradually, supported by policy changes and stable financial conditions; exchange rates adjust; domestic demand rebalances; and external gaps narrow without major disruption. In fact, policy-led reforms to fix domestic distortions could yield a double dividend, boosting growth at home and curbing imbalances abroad.
The alternative is disorderly adjustment, driven by sudden shifts in market sentiment or financial conditions. A reversal of capital flows would force a rapid correction of deficits, a sharp contraction in output, and potentially a serious financial crisis with a material loss of global output.
Everyday decisions
Global imbalances are not the result of mysterious forces. They are an outcome of everyday economic decisions—how much to save, how much to invest, and how to plan for the future. They reflect the fact that countries, like households, do not always spend exactly what they earn.
At their best, imbalances allow countries to share risk, smooth consumption, and allocate capital efficiently across borders. At their worst, they reflect domestic distortions, create vulnerabilities, and risk a costly reckoning. The thrifty household and the borrowing neighbor will eventually have to renegotiate their arrangement. The question is whether they can do so without creating a crisis that neither wanted.
That is the enduring challenge at the heart of the global economy—and the reason Keynes’s “secular international problem” remains with us today.
 
 
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Despite lower gas storage levels compared to previous years, the Member States and the Commission consider there is no immediate risk for security of gas supply in the EU. In a meeting of the Gas Coordination Group (GCG) this afternoon, experts from the Commission and Member States confirmed that while the situation on global energy markets remains exceptional and requires close monitoring, it also differs significantly from that of 2021/2022. Today, the EU is better prepared, thanks to increased diversification, higher LNG import capacity, and reduced gas demand.
Based on historical projections, the EU is on track to achieve an adequate level of winter preparedness. Under the current circumstances, the Commission sees no reason to intervene. The EU gas system is resilient enough to cope with lower storage levels for the upcoming winter.
Overall, the situation in the Middle East remains unstable and Qatari LNG production is still shut down. More recently, heatwaves in Europe have driven up gas demand for power generation. Geopolitical uncertainty continues to drive significant price volatility. The Commission will keep monitoring the situation very closely in cooperation with Member States and stakeholders. A further meeting of the Gas Coordination Group is scheduled for 24 September.
 
 
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Blog | US tech giants are increasingly tapping the euro area bond market to fund their investments. The ECB Blog investigates the consequences for this market and the potential for these developments to reshape it.

The infrastructure for artificial intelligence (AI) requires huge investments. Think of the gigantic data centres and the massive electricity consumption to power them. US tech giants, including Google, Amazon and Microsoft, operate massive cloud and AI infrastructure. That is why these companies, known as hyperscalers[1], are tapping into all corners of global financial markets to fund their expansion. And increasingly they are turning to the euro area corporate bond market for some of that funding.
The growing presence of hyperscalers in the euro area corporate bond market has several consequences. For one, it could increase concentration and raise investor exposure to the technology sector and the US economy, similar to trends already felt in equity markets, where hyperscalers have become dominant. Furthermore, the surge in big tech borrowing could make it harder for other companies and other economic sectors to access finance by reshaping investors’ asset allocations. It also raises a key market-functioning question: can euro area financial markets smoothly handle such large and concentrated debt inflows?
The AI investment boom has reached euro area credit markets
Hyperscalers are projected to need more than USD 1 trillion for capital expenditure in total by 2028.[2] That equals a stunning 3% of current annual US GDP. Planned investments are becoming too large to be financed solely through internally generated cash flows. Consequently, big tech companies are shifting away from self-funding towards external sources of finance, including bond issuance.
First, hyperscalers tapped the US dollar corporate bond market and then increasingly other credit markets, not least in the euro area. This is not an unusual strategy in finance. Funding in global credit markets is the bread and butter of global firms, which have an incentive to move beyond their domestic credit market for several reasons. They may be seeking to lower their borrowing costs,[3] diversify funding sources, broaden their investor base or match expenditures in foreign currencies. Big European companies with global activities do this as well.
The large funding needs of US hyperscalers led them to follow this playbook and increase their reliance on “reverse Yankees” (bonds issued by US firms in foreign currency). In their first big wave of issuance outside the United States, hyperscalers picked the euro as the most beneficial currency for foreign funding. The euro accounts for close to 10% of the outstanding stock of bonds issued by these firms.
What volumes are we talking about? These issuers currently account for slightly over 1% of benchmark indices for euro-denominated corporate bonds, with around €40 billion of bonds outstanding. Their share in euro-denominated “reverse Yankee”issuance almost doubled between 2025 and 2026.[4] US big tech companies now represent just shy of 10% of the gross new issuance of euro-denominated bond debt attributable to non-financial corporations (Chart 1, panel a). This year alone, Amazon and Alphabet have been the largest issuers in the euro area non-financial corporate bond market, with the Amazon transaction setting an all-time size record.

Chart 1
Big tech’s rising weight in the euro area corporate bond market

Sources: Dealogic, Bloomberg Finance L.P. and ECB calculations.
Notes: Only euro-denominated tranches issued by non-financial corporations identified using Dealogic data. Excluding private placements and convertible bonds.
Panel a: The share of issuance is the share in total euro-denominated investment-grade issuance by financial and non-financial corporations. The share of outstanding is the share in the ICE-BofA euro investment-grade corporate index. The latest observations are for 20 August 2026.
Panel b: QE stands for quantitative easing, and here specifically to the period during which the Eurosystem bought corporate securities under its corporate sector purchase programme (CSPP) and/or under Pandemic Emergency Purchase Programme (PEPP). The latest observations are for 20 August 2026.

The arrival of US big tech is shaking up old beliefs in the euro area credit market. In an economy known for being historically bank-based, euro area corporate bond markets were often perceived by issuers and investors as not having the breadth and depth to support large issuances. During the period of quantitative easing when central banks bought sovereign and corporate bonds, this started to gradually change. The euro area corporate bond market broadened its network of issuers and became a more reliable stage for funding larger investment needs.[5] Issuance of this scale signals that the euro area can absorb very large corporate bond deals on its own (Chart 1, panel b).
US big tech can broaden euro area corporate bond markets
Hyperscalers are expanding the scope of the euro area corporate bond market by introducing longer maturities, greater exposure to the technology sector and higher-rated debt. First, US big tech issues significantly longer-dated maturities than other economic sectors do. This helps build the long end of the yield curve (Chart 2, panel a), which domestic corporate issuers use less often. Second, the growing presence of hyperscalers in primary markets – and their inclusion in benchmark indices – gives bond investors greater exposure to the technology sector. This is particularly relevant in Europe. The weight of the technology sector in euro area benchmarks remains around three times lower than in comparable US indices.
Finally, hyperscalers have brought higher-rated debt to the euro area corporate bond market (Chart 2, panel b). With the current wave of debt issuance still in its early stages, these firms exhibit strong balance sheets, which translate into favourable assessments by credit rating agencies (e.g. often AA- or higher). This range complements the euro area landscape where most corporate issuers fall in the A to BBB class. As AI is a new sector, however, the way rating agencies approach this sector may be based on assumptions on future revenue growth and leverage which may not stand the test of time, heightening the vulnerability to mispricing of credit risk.

Chart 2
How the US tech sector is diversifying the euro-denominated corporate bond market

Sources: Bloomberg Finance L.P. and ECB calculations.
Notes: Panel a: Distribution of outstanding amount of debt for hyperscalers, as well as for euro area and non-hyperscaler US constituents of the Bloomberg EUR IG credit index within the technology sector, as of 20 August 2026. Panel b: Distribution of outstanding amount of debt for US and euro area constituents of the Bloomberg EUR IG credit index by rating, as of 20 August 2026. Issuers are grouped by country of incorporation of the ultimate parent. The y-axis shows which percentage of the overall debt issued by a specific category of issuer falls in the different maturity buckets. Issuers are grouped by the region of the country of incorporation.

Is there a risk of crowding-out?
Investors active in investment-grade corporate bonds denominated in euro are playing a prominent role in the financing of US hyperscalers’ capital expenditures. But does this mean that there is substantially less interest in bonds issued by euro area companies? Data analysis and market intelligence suggest that this has not been the case during this first issuance wave and that adaptation has helped.
Investors continued to show strong demand for euro-denominated hyperscaler bonds until mid-2026. Support subsequently weakened, and cover ratios − a measure of investor demand relative to the supply of a new bond − started to edge down. But this likely reflected a normalisation, as investors re-evaluated their risk compensation in light of the prospect for continuous flows of long-maturity issuance. By contrast, cover ratios for euro area issuers have remained strong and little changed throughout 2026. Some European issuers reportedly timed their issuance to avoid days when hyperscalers tapped the market, supposedly with a view to avoiding direct competition and preserving investor demand.
Investors also started to adapt, demanding greater compensation for the risks associated with hyperscaler debt. Hyperscalers’ credit spreads have started to increase on news of higher expected AI-related capital expenditure and more issuance announcements. Across all maturity segments, investors are demanding a rising risk premium to absorb the supply and deal with the greater uncertainty over the medium-term earnings outlook (Chart 3).[6]

Chart 3
Hyperscaler euro spreads edge up even as spreads of other issuers remain stable

Average credit spread of hyperscaler euro-denominated bonds across maturities and range between average spread of AA- and BBB-rated corporate issuers excluding hyperscalers
basis points

Sources: Bloomberg Finance L.P. and ECB calculations.
Notes: Asset swap spreads of corporate bond issuers for constituents of the Bloomberg EUR IG corporate index excluding financials. The shaded area represents the range between the index-weighted average spread of AA-rated and BBB-rated issuers, excluding hyperscalers. The curve reflects the index-weighted average of credit spreads of Alphabet, Amazon, and Microsoft, which are AA- and AAA-rated. The vertical dashed lines mark the announcement dates of Amazon Alphabet and Amazon euro-denominated issuance. The latest observations are for 20 August 2026.

Despite this reassuring initial assessment, US big tech companies could push up borrowing costs for all sectors as they accumulate debt and account for a growing share of bond markets, with a potential spillover to the sovereign and supranational segment of the bond market. This would depend in part on whether the investor “pie” is fixed, with big tech taking a larger slice, or whether it can expand to absorb the additional issuance. Spillover effects could happen through three main channels.
First, supply matters. The scale of big tech supply of new bonds may strain investor appetite. That could force hyperscalers − and similarly rated peers − to offer bonds at lower prices with wider yield spreads. The expectation of even greater bond supply in the future amplifies this effect, because investors might be reluctant to accept a current spread level if they expect even higher spreads in the future.
Second, investors have finite balance sheets and portfolio limits. They may reduce holdings of other bonds to make room for large hyperscaler deals. That could create a crowding-out effect that raises costs even for issuers from unrelated industries. Euro area investor exposure to hyperscaler debt remains relatively small for now, but is growing rapidly. Hyperscalers accounted for 15% of the increase in domestic euro-denominated corporate bond holdings in the year to March 2026, with strong demand from pension funds and insurers. For these investors looking for high-quality, long-maturity assets, hyperscaler debt may look like a possible alternative to some safe-haven style securities.
Third, bond index mechanics can amplify the effect. As hyperscalers gain weight in bond indices, passive, benchmark-tracking investors may mechanically rebalance towards them, intensifying the pressure on other bonds and further influencing spreads.
Conclusion
The rising presence of hyperscalers can bring diversification and growth to the euro area corporate bond market. For the time being, spillovers to other corporate issuers’ access to market-based funding remain limited, and the impact on investor portfolios is not substantial. In the United States, AI-driven demand for long-dated funding has reportedly contributed to the recent rise in long-term real yields. No such spillovers are evident in the euro area so far, reflecting smaller big tech issuance and resilient sovereign bond markets.
However, this could be merely the start of a financing wave of unprecedented proportions which could demonstrably reshape bond markets, including in the euro area, prompting issuers, intermediaries and investors to adapt.
While the dynamics of this adaptation are uncertain, the sheer scale of hyperscalers’ future borrowing needs, coupled with expectations of sustained strong yet uncertain earnings, warrants close monitoring. Potential international spillovers, fast-rising leverage (especially if other, less transparent, debt markets start being tapped) and broader implications for the functioning of euro area financial markets all demand close attention.
The views expressed in each blog entry are those of the author(s) and do not necessarily represent the views of the European Central Bank and the Eurosystem.

Hyperscalers are cloud providers that manage extensive networks of data centres, elastically delivering infrastructure, platform, and software services at a very large scale. In this blog, the term “hyperscalers” refers to five US tech companies: Alphabet, Amazon, Meta Platforms, Microsoft and Oracle.

Lower bound of credit analysts’ estimates.

For more details, see Domenech Palacios, M., Jančoková, M. and Tomov, T. (2025), “Reverse Yankee bonds”, The international role of the euro, ECB, June.

For more on euro-denominated bond issuance in 2025, see Section 1.3 in “The international role of the euro”, ECB, June 2026.

See Arce, Ó., Mayordomo, S. and Gimeno, R. (2021), “Making Room for the Needy: The Credit-Reallocation Effects of the ECB’s Corporate QE”, Review of Finance, Vol. 25, Issue 1, February, pp. 43-84, and Darmouni, O. and Papoutsi, M. (2022), “Non-bank lending to mid-size firms in Europe: evidence from corporate securities”, Working Paper Series, No 2663, ECB, revised March 2025.

This premium is significantly higher at the long end, but this is influenced by the longer maturity of hyperscaler bonds compared with other firms.

 
 
 
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The Council today gave its final approval for an ambitious overhaul of the EU customs framework – the most comprehensive reform of its kind in decades.
The updated legislation gives the Union a more modern toolbox and innovative new instruments to better facilitate global trade, especially in e-commerce, collect customs duties more efficiently and tighten controls on non-compliant, dangerous or unsafe goods.
Managing the rise of e-commerce 
The updated union customs code clarifies that non-EU e-commerce platforms will be considered the goods’ importer when selling into the EU and are therefore responsible for ensuring that all customs formalities and duty payments are handled, rather than the final EU consumer.
The legislation also features a new system of penalties for e-commerce operators that fail to fulfil their customs obligations, such as making sure that EU standards are upheld and appropriate duty paid. The most serious cases of non-compliance may incur fines of up to 6% of the company’s annual import value of goods in the preceding year, the removal of certain customs privileges and even access restrictions to online platforms.
Finally, to help cover rising costs from monitoring the growing number of small parcels entering the EU via e-commerce, an EU-wide handling fee on small parcels will be introduced by 1 November 2026. The Commission will set the level of the fee before it starts being applied by EU member states.
The handling fee is separate from the earlier Council decision to remove the historical customs duty exemption for imports valued at less than €150.
The EU customs authority
The text establishes a new decentralised EU agency for customs to coordinate governance of the customs union.
Specifically, the EU customs authority will analyse the constantly updated import and export data contained in a new, state-of-the-art, EU customs data hub – one central platform for importers and exporters to interact with customs in the EU. This will help member states to identify the riskiest cargo that should be prioritised for inspection.
The authority will also help establish priority control areas and risk criteria, and coordinate EU-level crisis management for customs. It will be located in Lille, France and begin operations in 2027.
Support for the most reliable traders
The new legislation creates a new category of the most transparent businesses – trust and check traders.
Under this scheme, companies providing comprehensive information on the movement and compliance of their goods, along with other stringent criteria, will enjoy simplified customs procedures, saving them time and money.
The most reliable companies will be able to release their goods into circulation in the EU without any active customs intervention at all.
Next steps 
The European Parliament is expected to approve the final text later in September, ahead of its signature and publication in the EU’s official journal. Use of the new data hub to record imports to and exports from the EU will become mandatory for e-commerce businesses on 1 July 2028 and for all traders from 1 March 2034.
Background
For over 50 years, the EU customs union has been operating efficiently across national borders, managed by national customs offices working together. As one of the world’s largest trading blocs, the EU customs union manages trade worth over €4.3 trillion, accounting for around 14% of global trade.
In 2025, 2,200 customs offices and 84,000 customs officials collected almost €31 billion in customs duties and managed the import, export and transit of around 6 billion e-commerce parcels and more than 1.5 billion items in traditional trade. Over 90% of e-commerce parcels arrived in the EU from China.
 
 
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Today, the Commission has designated ChatGPT as a Very Large Online Search Engine (VLOSE), as well as Reddit and Roblox as Very Large Online Platforms (VLOPs), under the Digital Services Act (DSA). These services declared that they reach at least 45 million average monthly users in the EU and thus meet the threshold for designation.
Following the notification of the designations, these services have four months, i.e. by January 2027, to comply with the additional DSA obligations for VLOPs and VLOSEs, such as assessing and mitigating the systemic risks stemming from their service and algorithmic systems related to the dissemination of illegal content, the negative effects on minors, users’ physical and mental well-being, fundamental rights, electoral processes and public security.
With these designations, the Commission will gain investigative powers to assess the functionalities behind these services and, where applicable, any related system. The Commission will be competent to supervise compliance with the DSA, in cooperation with Coimisiún na Meán for ChatGPT, and the Authority for Consumers and Markets (ACM) for Reddit and Roblox. These entities serve as the Digital Services Coordinators respectively for Ireland and for the Netherlands, where the designated services are established.
ChatGPT is an Artificial Intelligence (AI) system that can engage with and respond to users’ prompts and queries, including by searching the web. Hence, ChatGPT is a hybrid service that qualifies as an online search engine under the DSA.
Reddit is a discussion-based platform that enables users to create, share, and interact with content within topic-based communities. Roblox is an immersive gaming and creation platform that enables users to create, publish, and play games developed by other users. As these services enable users to disseminate third-party content to the public, they qualify as online platforms under the DSA.
Roblox, Reddit and ChatGPT are already subject to the general obligations applicable to online platforms and search engines under the DSA, respectively.
Background
The Commission has now designated 28 very large online platforms and search engines under the DSA.
The supervision and enforcement of the DSA is shared between the Commission and Digital Services Coordinators, which are responsible for the enforcement and supervision of the Digital Services Act in the Member States.
Quote(s)
 ” These new designations mean that ChatGPT, Reddit and Roblox will now be held to a higher standard of scrutiny and accountability in the European Union, in line with their large impact on our citizens and society. We continue to watch the digital landscape closely and will not hesitate to designate any platform that meets the threshold for enhanced supervision under the Digital Services Act.”  –Henna Virkkunen, Executive Vice-President for Tech Sovereignty, Security and Democracy

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G20 merchandise trade accelerated in Q2 2026. Measured in current US dollars, quarter-on-quarter import growth rose markedly to 6.7%, from the 5.2% growth recorded in the previous quarter, reflecting strong increases in a number of G20 economies. G20 merchandise exports growth remained broadly flat at 5.9%. Preliminary estimates also point to an acceleration in services trade, with exports rising by 3.4% and imports by 2.5%, as compared to 2.0% and 1.5% respectively in Q1 2026 (Figures 1 and 3).1
In North America, merchandise import growth for the United States increased to 7.8% in Q2 2026, up from 6.0% in the previous quarter, partly reflecting higher purchases of computers and computer accessories, while export growth slowed to 3.9%, despite higher energy prices boosting exports in crude and petroleum. By contrast, Canada’s exports surged by 13.5%, supported by energy products and motor vehicles, while import growth slowed. In Mexico, both exports and imports accelerated, with growth reaching 12.2%, and 7.7% respectively. In East Asia, China’s trade slowed markedly from the high growth for both exports and imports in Q1 2026 (13.4% and 16.9% respectively), but with Q2 2026 exports still growing by 4.7% and imports by 8.9%, both supported by mechanical and electrical products and high-technology goods. Japan’s trade also slowed, despite higher petroleum imports. By contrast, Korea’s imports surged by 11.6%, reflecting higher purchases of energy products and semiconductor equipment, while export growth continued to remain strong at 19.3%, supported by sales of semiconductors. In Europe, higher purchases of energy products boosted import growth to 4.2%, 4.2% and 4.1% in Germany, France and Italy, respectively, while exports grew by 2.1%, 1.8% and 1.8%. In the United Kingdom, higher trade in machinery and transport equipment and in fuels explained a rebound in exports to 6.6% and in imports to 5.7%. Merchandise trade also accelerated in India, where exports surged by 20.4%, with increases across the board, and imports rose by 8.7%, partly driven by purchases of petroleum and of electronic goods.
Strong international services trade growth was recorded in Q2 2026 in East Asia. Services trade accelerated markedly in China, with exports soaring by 16.6%, boosted by sales of transport, travel and ICT services. After growing by 3.3% in Q1 2026, China’s imports rose by 7.5% in Q2 2026, on higher spending for transport, insurance, and other business services. In Japan, exports grew by 7.8%, after negative growth in the previous quarter, supported by sales of intellectual property, ICT and other business services. Imports, however, fell by 2.0%, on lower spending on travel and insurance services. In Korea, import growth recovered to 3.9% in Q2 2026 from negative growth in Q1 2026, as higher transport payments more than offset lower travel expenditure. Export growth slowed but remained solid at 5.6%, reflecting higher transport and travel receipts. Services trade also accelerated in the United States, exports rose by 1.2% after 0.9% in Q1 2026, mainly supported by higher receipts from intellectual property and ICT. Imports grew by 1.5% in Q2 2026, driven by transport and insurance services, following no growth in the two previous quarters. No clear pattern was observed in the G20 European economies in Q2 2026. While exports accelerated in France, reflecting strong transport and travel receipts, they decelerated in Germany and Italy. In the same vein, services imports decreased in France while they increased in Germany and Italy, reflecting essentially higher transport and travel payments.
Click here to access the interactive charts.
 
 
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 Asheville, N.C., United States: International Monetary Fund Managing Director Kristalina Georgieva delivered the following remarks at the G20 Finance Ministers and Central Bank Governors Meeting in Asheville, North Carolina:
“I would like to thank the Government of the United States for hosting this week’s G20 meeting, and Secretary Bessent and Chairman Warsh for their leadership in delivering a focused discussion on key global economic priorities.
During our discussions, there was a strong convergence of views around the importance of lifting potential growth everywhere. In a shock-prone and uncertain world, structural reforms and sound fiscal and monetary policies are essential to creating the foundation for stronger and better-balanced global growth. Beyond domestic responsibilities of policymakers, the G20 reminds us that international cooperation has a crucial role to play, especially in helping countries manage debt challenges, limit spillovers, and address global imbalances.
Global Economic Outlook
Since April, the global growth outlook for 2026 has firmed at around 3 percent. The global economy has absorbed the impact of the energy supply shock better than expected, through the use of oil and gas reserves, new sources of energy, and demand management measures. Surging AI investment—including in power projects to satisfy energy needs—is driving growth, in the US in particular, and in other economies integrated into the AI value chain, such as Korea.
But behind the averages there is significant divergence in economic fortunes and risks to the outlook remain high.
First, the energy shock is not over. The Strait of Hormuz remains largely closed, strategic oil and gas reserves will need restocking, AI drives up energy demand, and in the northern hemisphere winter is coming.
Second, public debt—at almost 100 percent of GDP worldwide—now exceeds its post-World War II highs and is set to climb further. Looking back, the debt trajectory resembles a staircase: big vertical steps when shocks occur, little or no reduction afterward.
Third, the disinflation process has stalled in many countries. Mounting fiscal pressures are pushing core bond yields upward and the interplay between fiscal and monetary policy worries markets.
Last, but not least, the future impact of AI on productivity and financial stability is dogged by unknowns.
The policy priorities are clear. Central banks must focus on their price stability mandate. Fiscal authorities must hammer out credible medium-term consolidation plans. Structural policies should concentrate on cutting red tape and removing self-inflicted barriers to growth—because stronger potential growth would help address the fiscal problem, and addressing the fiscal problem would help lift growth prospects.
Debt Challenges in Developing Countries
The sovereign debt landscape for emerging and low-income countries has gradually improved in recent years, thanks to domestic policy efforts and international cooperation. But progress has been uneven, and persistent risks and uncertainty in the global economy, including spillovers from the significant increase in yields in advanced economies, call for policy discipline and underscore the importance of building buffers.
The increase in global interest rates is of particular concern. As key advanced economy yields rise to multi-year highs, they lift most of the world’s yield curves up with them. In some emerging markets this more than fully offsets hard-won spread compression.
High refinancing needs and rising debt-service costs are constraining many developing economies, in particular low‑income countries, limiting their capacity to finance critical spending on infrastructure, health, and education, which undermines growth and, in turn, debt sustainability.
These challenges are compounded by a sharp decline in net external financing, including cuts in official development assistance, and a marked reduction in new inflows from non‑Paris Club creditors.
Helping countries create fiscal space to support growth-enhancing spending is even more pressing in the current conjuncture.
Addressing these challenges requires a collective effort along three dimensions:

First, decisive action is needed in countries where debt is unsustainable, supported by further improvements in restructuring processes. Important progress has already been achieved, particularly under the G20 Common Framework. The G20 MOU template agreed this year is part of this effort. The Global Sovereign Debt Roundtable has also advanced its work, with the publication in April of an updated “Restructuring Playbook” and important clarifications to facilitate implementation of comparability of treatment and inter-creditor group coordination. These efforts should continue, including developing solutions for countries not eligible to the Common Framework. We will continue to remain strongly engaged, including through greater use of our “good offices” and work under the GSDR.
Second, accelerating the implementation of the IMF-World Bank Three-Pillar Approach to support countries with sustainable debt and pursuing strong growth-enhancing reforms is a key priority. Together with the World Bank, we have strengthened support for countries on reform implementation and domestic resource mobilization and continue to work on ways to encourage effective liability management operations, including to incentivize higher private sector inflows at lower cost. This has worked well in countries such as Ecuador or Pakistan. Securing strong support from other partners, including bilateral creditors, is essential. We count on the G20 to take leadership in this collective support to growth and investment.
Third, there is no substitute for sound economic fundamentals. Helping countries build resilience and prevent unsustainable debt build-up is critical, including through strengthening debt transparency, debt management capacity, and debtor–investor relations.

Global Imbalances
Our latest External Sector Report shows that excess global imbalances—those not explained by fundamentals—widened further in 2025, by 0.7% of GDP, the largest increase in the past decade. This widening was broad-based, with major contributions coming from the two largest economies.
Excess imbalances in major economies can signal uneven growth patterns and macro-financial vulnerabilities. They can result in cross-border spillovers, trade tensions, and economic fragmentation. And this is what we have seen: the widening of excess global imbalances in recent years has taken place against a backdrop of ongoing trade tensions and shifts in the configuration of trade relationships across countries.
The message from Fund research is clear: since macroeconomic factors are the main drivers of imbalances, sustained rebalancing requires policy action in both surplus and deficit countries. In surplus economies, market-oriented structural reforms can boost domestic consumption, promote investment, and lift growth prospects. In deficit economies, appropriate fiscal consolidation can increase savings and help rebuild fiscal buffers. Simultaneous—mutually reinforcing—policies across major economies would yield the best outcomes, including for growth.
At the IMF we recognize our responsibility to support members in addressing imbalances.

We are working with member countries and other international organizations to improve cross-country data and external sector statistics.
We are continuing to refine our EBA methodology that underlines our assessment of excess imbalances. We have extended our analytical framework to better understand the linkages between trade and industrial policies and current account imbalances. We are advancing complementary work on capital flow and stock imbalances.
Our Comprehensive Surveillance Review aims to deliver a more comprehensive and forward-looking assessment of external sector issues at the country level, as well as cross-country spillovers. The goal is to move from diagnosis to action.

The Fund is strongly committed to engaging with our members to address global imbalances. The G20 offers a unique platform to advance this dialogue, and we will continue to support our membership going forward.”
 
 
Compliments of the International Monetary Fund The post IMF | Managing Director Kristalina Georgieva’s Statement at the Conclusion of the G20 Finance Ministers and Central Bank Governors Meeting in Asheville, North Carolina first appeared on European American Chamber of Commerce New York [EACCNY] | Your Partner for Transatlantic Business Resources.

Blog | In a world of frequent shocks, central bank communications should anchor expectations by explaining how policy responds to changing conditions, rather than committing to a fixed path.
In a world of frequent and faster-moving shocks, where uncertainty is high and markets react instantly, central banks face a fundamental communications challenge: how to help the public understand monetary policy objectives while explaining how policy may evolve as economic conditions change. In this regard, explaining the policy framework, the reaction function of the central bank, and the way in which economic uncertainty and risks play into alternative scenarios have become the foundation of the central banker’s communications playbook.
As central banks adapt their policy frameworks and tools to a more uncertain and shock-prone world, it is only natural that they are also reassessing how best to communicate policy frameworks and talk about the conjuncture. A new IMF note explores these questions and sets out principles for effective monetary policy communication.
Perils of commitment
During the low-inflation era that followed the global financial crisis, communication was dominated by forward guidance, centered on precommitting to a likely future path of the policy rates. Such an approach can be effective when policy is stuck at the lower bound and inflation expectations are drifting down. But commitments may become costly when circumstances change. Supply shocks, inflation surprises, or abrupt shifts in the balance of risks may require policymakers to adjust course.
As a result, central bank communication has shifted toward explaining how policy will respond as economic conditions evolve and new data become available.
Understanding reaction functions
A central task has therefore been communicating the reaction function: how policymakers interpret incoming data, weigh risks, and navigate tradeoffs between key central bank objectives. The strength of underlying inflation, the evolution of inflation expectations, and the nature of monetary policy transmission are the key inputs to the reaction function. “Data dependence” has featured prominently: central banks emphasize what data matter, how data shape decisions, and what future contingencies may mean. The goal is to help the public understand the logic that guides a central bank’s decision-making.
Explaining Risks and Uncertainty
Central banks convey their views on the economic outlook through forecasts and scenarios. This is crucial because policy decisions are based on where the macroeconomy is expected to go.
But forecasts are not promises. In a shock-prone world, they are subject to tremendous uncertainty. If forecasts are communicated too precisely, or policy-rate projections are interpreted as commitments, revisions can be misinterpreted as policy reversals. In this context, scenarios can help illustrate how policy might respond under different economic outcomes, while reinforcing that future decisions will depend on incoming data and evolving conditions.
Communication for a shock-prone world
Forecasts should be accompanied by a clear explanation of risks. Effectively communicating the reaction function can help the public better understand how policy may respond under alternative economic outcomes. By contrast, rate-path commitments should be exceptional and conditional, with clear escape clauses so that any conditional promise is clearly subordinate to the price-stability mandate.
More isn’t always better
Clear communication can anchor expectations and support accountability. But more communication is not always better. Social media, automated news analysis, and artificial intelligence mean that central bank communications are parsed in real time. Too much detail can lead markets to focus excessively on decoding the central bank rather than assessing fundamentals. Hence conditionality relative to the evolving outlook is foundational.
Volatility’s value
The goal of central bank communication is not to eliminate volatility. Rather, it is to reduce uncertainty about how the central bank will respond, limiting surprises around policy decisions.
Volatility is not, in and of itself, undesirable. When asset prices move in response to new information about incoming macroeconomic data that shape the inflation and growth outlook, markets are performing their essential price-discovery function. Such volatility is fostering the information content of expectations and can in turn provide information to policymakers.
Speaking with humility
Successful communication therefore depends on fostering a better understanding of the policy framework. That means being clear about central bank objectives, the reaction function, and forecasts. Given the high degree of uncertainty globally, central banks need to be explicit about risks, with the goal of reflecting the degree of underlying macroeconomic uncertainty accurately.
 
 
Compliments of the International Monetary Fund The post IMF | Rethinking Central Bank Communications in an Uncertain World first appeared on European American Chamber of Commerce New York [EACCNY] | Your Partner for Transatlantic Business Resources.