Global growth barely exceeding 2.5% alongside inflation at 5.4% is the International Monetary Fund's (IMF) scenario if oil prices remain near current levels, around $100. Such a configuration points to a stagflationary environment, where stagnant growth coincides with rising prices.
This dynamic is typically detrimental to employment and household purchasing power, weighing on both companies and the broader economy.
Comparison with 2025 highlights deterioration
By comparison, 2025 recorded stronger global growth at 3.5% and lower inflation at 4.1%. The shift suggests a clear deterioration in economic conditions, largely linked to the conflict in the Middle East, although the precise magnitude of its impact remains uncertain.
A more severe downside scenario
The IMF also outlines a more adverse scenario, involving an escalation of the conflict and further increases in oil prices. In such a case, global growth could fall to around 2.0%, while inflation could rise towards 5.8%, intensifying stagflationary pressures.
Market resilience despite uncertainty
Despite these concerns, markets have remained relatively resilient, with US equities trading close to pre-conflict levels.
The implication is that investors may navigate this environment by focusing on markets less exposed to Middle Eastern risks, such as the United States, which is energy self-sufficient, and by identifying opportunities in regions less directly affected, including Poland and Latin America. See below our recommended portfolio:
