Bloomberg Economics forecasts show that crude oil prices will drive up global inflation through 2026.
In the baseline scenario, which assumes continued low-intensity conflict, the global GDP-weighted average would reach 4.2% in Q4 2026, up from 3.1% in Q4 2025, and then decline next year.
In advanced economies as a whole, inflation could peak at 3.4% compared to 2.5% at the end of 2025.
In emerging markets, excluding China, inflation is likely to jump from 5.8% to 7.6%.
The outlook remains uncertain. In an April forecast by Bloomberg Economics, economists considered two possibilities.
In an escalating war scenario, the price of oil would jump to $170 a barrel in the second quarter, driving global inflation to peak at 5.4% in the fourth quarter of 2026, the highest level since mid-2024.
In a sustained ceasefire scenario, oil prices fall to $80, leaving inflation at 3.7%. This is a more moderate break in the downward trend in inflation from 2022.
