PrintGlobal economy faces inflation and growth test amid escalating conflict in Iran - Goldman
BY Reuters | ECONOMIC | 04:56 AM ESTMarch 5 (Reuters) - A temporary surge in oil prices to $100 per barrel could slow global growth by 0.4 percentage point, Goldman Sachs
Under its baseline forecast, Goldman expects oil prices to increase a bit further before moderating to $76 per barrel on average in the first quarter of 2026 and $65 in the fourth quarter.
In an upside scenario, it expects oil prices to rise to about $100 per barrel, before normalizing over the course of 2026.
* Under its baseline forecast, Goldman estimates a "modest"0.1 pp drag on global GDP growth and a 0.2 pp boost to globalheadline inflation. * A jump to $100 per barrel could fuel a 0.7 pp rise inglobal headline inflation. * Central banks have historically not reacted directly tooil shocks, but tend to tighten policy modestly when inflationis elevated, or price shocks are large, the brokerage said. * Global monetary policy outlook will be mostly unaffectedunder the baseline forecast. * However, policy could turn more hawkish - potentiallythrough a delay in rate cuts in emerging markets - if oil priceshit $100 per barrel or if higher costs pass through to consumerprices at a higher-than-normal rate. * Higher oil prices are expected to weigh on real incomesand consumer spending, while oil exporters such as Canada andseveral Latin American economies may benefit.(Reporting by Akriti Shah and Siddarth S in Bengaluru; Editing by Sriraj Kalluvila)
