An energy-led supply shock has driven a relatively muted emerging-markets macro impact assessment. A new Citi Research report explores why the blow has been less than expected, at least so far, and looks at economies that could be more and less affected.
The Middle East conflict offers significant downside risks for the global economy. While Citi Research’s baseline 2026 growth forecast is only a bit lower than in February, more severe scenarios remain possible. Such outcomes could drag global growth below 2%, push headline inflation above 4%, and stoke recession risks.
The 2020s have seen “wildcards” arrive at a rapid rate: COVID, the Russia-Ukraine war, AI and trade wars. And we’re only halfway through the decade! In this new Must C report, Citi Research considers more potential wildcards. While not our base cases, all of these scenarios could reshape our world in the near future.
