The risk of persistently high inflation in the global economy is increasing, according to a Reuters poll of almost 500 economists, as the conflict in the Middle East enters its fifth month with no clear end in sight.
The survey, conducted between 29 June and 27 July, found that most economists raised their inflation forecasts while lowering growth expectations, reflecting growing concerns over the economic impact of the conflict.
Although hostilities were briefly paused during the polling period, renewed US military action and further Iranian strikes in the region have heightened uncertainty, suggesting that economic conditions could deteriorate further in the months ahead.
Economists increased their inflation forecasts for 39 of the 50 major economies covered by the survey for 2026 compared with projections made in April, with many citing the effects of the conflict. At the same time, growth forecasts were downgraded for 32 economies.
Looking ahead to 2027, inflation expectations were revised upwards for 37 economies, while growth forecasts were lowered for 21, indicating that inflationary pressures are expected to persist even as the outlook for economic activity weakens.
The findings suggest that major central banks may face renewed challenges in bringing inflation back to target levels after several years of monetary tightening, as geopolitical tensions continue to add pressure to global prices.
