Global Macro Trends
Between Growth and Inflation: Heightened Uncertainty and Energy Shocks Are Complicating Central Bank Policy Decisions
April 2026
Peace initiatives in the Middle East remain tenuous, due to contradictory remarks from US President Donald Trump and an apparent absence of consensus among Iranian officials. Consequently, uncertainty regarding future developments has intensified once again. With the war in its second month, its effects are increasingly evident in business operations. Companies are facing rising energy and commodity prices, higher transport expenses, and disruptions in global supply chains. Furthermore, should hostilities cease immediately, normal conditions are unlikely to be restored for several months due to extensive damage requiring repair of the region's energy and other critical infrastructure. Within this context, central banks face heightened complexity as they must keep inflationary pressures at reasonable levels while simultaneously supporting economic growth, which remains under strain.
IIn the United States, economic activity continues to expand at a satisfactory pace, and labour-market conditions remain relatively favourable. One significant contributor to this performance is the United States' robust domestic production of oil and natural gas, which serves to alleviate inflationary concerns and strengthens the competitiveness of American products. According to recent data, headline inflation has increased as a result of rising energy prices, while consumer sentiment has declined. This trend is expected to have a negative impact on private consumption in the coming period.
IIn the United States, economic activity continues to expand at a satisfactory pace, and labour-market conditions remain relatively favourable. One significant contributor to this performance is the United States' robust domestic production of oil and natural gas, which serves to alleviate inflationary concerns and strengthens the competitiveness of American products. According to recent data, headline inflation has increased as a result of rising energy prices, while consumer sentiment has declined. This trend is expected to have a negative impact on private consumption in the coming period.
In China, growth accelerated to 5% in Q1 2026 (Q4 2025: 4.5%), partly due to stronger exports. The war’s impact is expected to slow growth slightly over the coming quarters, as subdued global demand will limit export growth. This year, the government target has been set at 4.5%–5.0%, marginally below the 5% achieved in the past two years. Exports will likely continue as the primary growth factor since domestic demand is unlikely to increase significantly at this time. At the same time, higher strategic oil reserves and greater geographic diversification of imports provide increased flexibility in managing energy-related challenges.