Global | Hormuz and the limits of the global economy

Summary

Despite the closure of the Strait of Hormuz, the global economy is holding up better than expected, thanks to energy relief measures and the momentum from artificial intelligence. The outlook depends on trade reopening to prevent a rebound in prices.

Key points

• Key points:
• Europe is showing signs of weakness, with GDP falling in the first quarter due to swings in the Irish economy. Excluding this effect, however, the eurozone managed to grow by 0.3%.
• Inflation will exceed 3% in the second half of the year in the United States and Europe, prompting the ECB to keep benchmark interest rates unchanged or raise them moderately.
• Risks remain high. The cushion provided by oil reserves is temporary, and a prolonged rise in energy inflation could easily spill over into other prices and wages, with higher interest, which in turn could also affect financial markets.

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