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<Research>G Sachs Predicts Rising Oil & Gas Prices to Dent Global GDP Growth by 0.4 ppts, Raises US Recession Odds
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The outlook for oil and gas prices was expected to be further revised upwards, which will increase overall global inflation by 1 ppt and core global inflation by 0.2 ppts, thereby reducing global GDP growth by 0.4 ppts, Goldman Sachs said in its report. In an extremely adverse scenario, these impacts could be magnified by 2-3x. Although the blow of energy on US growth may be milder, it coincides with tighter financial conditions and weaker fiscal stimulus in 2H26, the broker highlighted. Therefore, it was expected that US economic growth will fall below trend levels, unemployment will rise, and the 12-month recession probability will be raised to 30%. The broker still expected the US Fed to cut interest rates in September and December, but postponed the expected rate cuts by the Bank of England to 2027 and anticipated the European Central Bank to raise rates in April and June. AASTOCKS Financial News Website: www.aastocks.com |
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