• Global growth is now expected around 2.9% in 2026, but weaker than earlier forecasts.
• Inflation is rising again globally, mainly due to energy price shocks.
• Economists warn of “stagflation risk” (slow growth + high inflation).

👉 Key reason: geopolitical tensions, especially the Middle East conflict.

🛢️ 2. Oil & Energy Crisis Driving Everything

• Oil prices have surged above $110+ per barrel, up ~50% recently.
• Gas prices in Europe and globally have jumped sharply.
• The disruption of the Strait of Hormuz (major oil route) is a major risk.

👉 Impact:

• Higher fuel costs 🚗
• Expensive food & transport 🍞
• Pressure on household budgets worldwide

📉 3. Stock Markets Under Pressure

• Global markets (US, Europe) hit 2026 lows.
• Major indices like Dow Jones, Nasdaq are in correction territory.
• Investor sentiment is weak due to uncertainty.

👉 However:

• Some equity fund inflows returned ($37B+) due to hopes of de-escalation.

🇪🇺 4. Europe & UK Facing Strong Impact

• Eurozone growth is near stagnation (~1%).
• UK economy:
  • Growth downgraded
  • Inflation rising
  • Energy costs hurting households

👉 Central banks may raise interest rates again, not cut.

🌏 5. Global Business Activity Slowing

• PMI data shows:
  • Slower growth in US, Europe, Japan
  • Weakest growth in India in 3 years
• Rising input costs are squeezing companies worldwide.

🔋 6. Energy Transition Paradox

• High fossil fuel prices → push toward renewable energy
• BUT:
  • High interest rates
  • Expensive projects
  • Slow approvals

👉 Result: clean energy growth is facing delays despite urgency.

🌾 7. Food & Supply Chain Risks

• Fertilizer, fuel, and shipping disruptions are increasing:
  • Food prices 🌾
  • Supply shortages
• Risk of global food inflation rising further.