The International Monetary Fund (IMF) has revised down its global economic growth projections, from 3.3% to 3.1%, amid a backdrop of heightened geopolitical risks. In its latest World Economic Outlook, the IMF now forecasts global growth to slow to 3.1% in 2026 and 3.2% in 2027. The outlook is shaped by prolonged geopolitical shocks affecting trade, confidence, and energy markets, as well as rising energy and food prices, which are expected to push global inflation to around 4.4% and strain household incomes.
The institution also noted that tighter financial conditions, with elevated interest rates, could limit consumption and investment, with more pronounced effects on emerging and developing economies. In oil markets, prices recorded weekly declines of over 12%, with Brent trading around USD 95.25 and WTI at USD 91.28 in Wednesday’s session.
The drop was driven by easing tensions between Iran, the United States, and Israel, following a temporary peace agreement and recent statements by the U.S. President suggesting a possible end to the conflict in the coming days, leading investors to anticipate a normalization of crude supply.
Losses were partially offset by reports indicating a reduction of around 600,000 barrels per day in Saudi Arabia’s production capacity following attacks on energy infrastructure. Still, the International Energy Agency warns that oil prices do not yet fully reflect the Middle East crisis, which has already affected more than 80 infrastructures and around 13 million barrels per day, with full recovery potentially taking up to two years.
In equity markets, major global indices closed in positive territory, reflecting investor optimism about a possible definitive resolution to the Middle East conflict. In the United States, on a weekly basis, the S&P 500 rose 2.21% to 6,967.38 points, while the Euro Stoxx 600 gained 0.89% to 620.35 points.
Despite this more optimistic backdrop, gold prices increased by around 2.36% cumulatively, reaching USD 4,814.73 per ounce, in a context where the dollar weakened by approximately 1.71% against major currencies, with the Bloomberg USD Index standing at 98.14 points. Meanwhile, the euro appreciated, with the EUR/USD pair posting a weekly gain of 1.65% as of Wednesday, trading around USD 1.18 per euro.
Source: Expansão
