Credit Agricole: High Energy Prices Persist, but Global Growth Remains Surprisingly Resilient - FJElite

Geopolitical tensions continue to drive the outlook through energy markets. Oil supply losses from the Persian Gulf have proved harder to offset than the Russian disruption in 2022, keeping the forecast for Brent relatively elevated at around $95 a barrel through late 2026 and 2027. Europe also faces renewed natural gas risks, with inventories unusually low, Qatari LNG still absent and Asian demand expected to keep the market tight into 2027.

Despite high energy costs, persistent inflation and tighter monetary conditions, growth remains relatively resilient. US GDP is forecast at 2.1% in 2026 and 2.0% in 2027, supported by strong AI investment, a still-solid labour market, supportive fiscal policy and household wealth. US inflation is expected to average 3.4% in 2026 before slowing to 2.3% in 2027. Emerging economies are also holding up well, helped by domestic demand and exports tied to metals, hydrocarbons and AI. China is expected to grow around 4.5% in both 2026 and 2027, although weak domestic demand and inflation of only around 1% suggest deflationary pressures remain.