The conflict in the Middle East is testing the resilience of the global economy.
The outlook is surrounded by high uncertainty and reflects the interaction of two opposing forces:
- On the upside, growth is supported by strong momentum in technology-related investment and production, lower tariff rates than previously assumed, and carry-over from robust outcomes in 2025.
- On the downside, the halt in shipments through the Strait of Hormuz and the closure and damage of some energy infrastructure has generated a surge in energy prices and disrupted the global supply of energy and other important commodities, such as fertilisers. This is raising costs, weighing on demand and adding to inflationary pressures.
