The war in the Middle East has caused prices of several commodities to rise, in particular oil which has neared historic highs. Although conflict’s trajectory remains highly uncertain, weaker supply and demand constraints compared to 2022 should limit the upward pressure on inflation. Household consumption and sectors least able to pass on rising production costs to sales prices (primarily consumer goods) are likely to be hit hardest. The ultimate effect on GDP growth will depend on the duration and severity of the damage. According to our baseline scenario, a recession should be avoided. However, if the conflict were to escalate to the point of causing shortages (of fuel or inputs), its impact on growth and inflation could lead to such a recessionary outcome
Our nowcasts for France, Eurozone and the United States.
Solid growth in Q1 2026. According to our nowcast, growth is expected to strengthen in the Eurozone (+0.4% q/q, after +0.2% in Q4) and in France (+0.3% q/q, after +0.2% in Q4), driven by a positive momentum despite the energy shock that began in March. In the United States, the rebound suggested by the GDP Now (+0.3% q/q, after +0.1% in Q4) is underestimated. This is because this indicator does not take into account the favourable post-shutdown effect (which our forecast of 0.9% q/q, non-annualised, does). In the other major Eurozone economies, growth is expected to have remained broadly stable: in Germany and Italy, the pace is expected to remain close to Q4 2025 levels (+0.3% q/q), thanks to public demand (investment and consumption)
The latest economic news.
Equity indices, Currencies & commodities, and Bond markets.
We have selected a set of indicators to track the impact of this new energy shock, caused by the war in the Middle East, on activity and prices in the Eurozone, the United States, oil and gas markets and emerging countries, and to see how much the current situation resembles the situation in 2022 at the outbreak of the conflict in Ukraine.This dashboard featuring graphs and comments will be updated on a monthly basis for as long as necessary.
The energy shock implied by the war in the Middle East has, for now, induced stronger reaction in oil and European gas spot prices than those observed following Russia's invasion of Ukraine.
This week, Washington DC will host two gatherings that should be important in their own right, and yet are unlikely to be: one is the Spring Meetings of the International Monetary Fund (IMF) and World Bank (WB), which brings into town thousands of top finance and central banking officials as well as private sector delegates from the financial sector and civil society; the other is the peace negotiations between Israel and Lebanon. The former is traditionally an opportunity to take stock and send a combination of reassuring messages to markets and stern admonitions to policymakers. The latter could have been history-making just for taking place. Yet both are certain to be overshadowed by developments in the Persian Gulf and US-Iran talks
Most developed countries are ageing rapidly. According to the United Nations population database, the proportion of people aged 65 and over in the group of “more developed countries” is projected to rise from 21.5% in 2026 to 32.3% by 2100. There are however significant differences between countries. Such increases pose a threat to social security systems. Without any specific reforms, pension and healthcare spending will rise while contributions from the shrinking working-age population will decline. Which countries are financially most vulnerable to ageing? We analysed this question for 16 developed countries using five ratios in our ageing vulnerability index.
The war in the Middle East has caused significant disruptions in the market for refined petroleum products, affecting not only Asia but also Europe. For the time being, the situation in Europe remains under control, largely thanks to stock levels that provide visibility for around one month. Nevertheless, Europe’s dual reliance on suppliers in the Gulf and Asia calls for caution. Supply status in the European market will be influenced by geopolitical developments in the Gulf and whether Asian producers choose to prioritise supplying their domestic markets.
Asset prices have been moving in unusual ways since the onset of the Gulf War (no safe havens, limited dollar rally and de-risking). Do financial markets know something we don’t, has something fundamentally changed in the way asset prices reflect economic expectations, or are they simply malfunctioning and about to swing wildly as things normalise? Unfortunately, it is impossible to know for sure, and what’s more, these hypotheses are not mutually exclusive. So far, markets appear to expect an inflation spike, met with a firm central response, with limited damage to growth, and a relatively swift return of inflation to target range. That may turn out to be correct. But far worse outcomes are also very plausible
The conflict in the Gulf has escalated in recent days, with an increase in strikes targeting oil and gas facilities (on both sides). The impact on energy prices has therefore intensified. A relatively rapid de-escalation of the conflict is unlikely, whilst there is a growing prospect of the conflict worsening along with its macroeconomic effects (higher inflation, lower growth). Central banks have taken note of this this week, but are waiting for greater clarity on how events will unfold before deciding how to respond. The markets, too, are taking a more cautious stance and anticipate that central bank will adopt more restrictive policies than previously expected for over the rest of the year. So do we.
The week of 16–20 March was particularly busy on the monetary policy front. No fewer than 21 central banks met against the backdrop of a common exogenous factor: the conflict in the Middle East that broke out in late February 2026. Prior to the onset of the conflict, 12 to 15 of these banks were either in an easing cycle or preparing to implement rate cuts. Ultimately, regarding policy rates, sixteen banks maintained the status quo, two opted for an increase and three for a cut
Although artificial intelligence (AI) has been around for a long time, its widespread use in the world of work, particularly in the service sector, is a new phenomenon that raises many questions. Which sectors or professions will be affected? Which others will benefit? Will the expected productivity gains materialise? Observing trends in the United States, where it all began, already provides some answers.
