Citi Research Macro Think Tank

Research evidence excerpt

Citi Research Macro Think Tank

Global Economics

By Nathan Sheets, Cole Langlois

2026 global growth revisions (Citi forecasts) 2026 Y/E policy rate forecasts: delta since Feb (Citi)

Change Since Dec-25 (Pct Pts) Bps

0.3 250 Onset of Iran Conflict Developed Markets 200

0.2 Emerging Markets

0.1 100

0 50

0 -0.1

Global -50

-0.2 DM -100

EM

-0.3 Hungary Canada Malaysia Mexico Peru Sweden Taiwan Thailand Vietnam India China Poland Czechia Chile Japan US Area Dec-25 Feb-26 Apr-26 Jun-26 Euro Australia Norway Korea Zealand Colombia UK Philippines Indonesia Africa Brazil South New

Source: Citi Research, Bloomberg Source: Citi Research

Global Inflation* • Our recent GEOS highlights that the Iran conflict continues to generate

YoY% YoY% headwinds for the global economy. To date, the pain has been manageable

20 10 with global growth for this year tracking near 2 which is down only a Headline (RHS) ½%,

few tenths from when the year began. Surging AI demand has been a key 16 Core (RHS) 8

support. That said, our forecast envisions lower oil prices, which remains a Energy (LHS)

12 6 key source of uncertainty as recent volatility in oil prices has highlighted.

• The conflict has resulted in increased inflationary pressures, primarily

8 4

through the pass-through of higher oil prices to energy inflation. Central

4 2 banks have generally been hesitant to reprise their post-pandemic strategy

of “looking through” an evolving supply shock. As a result, central bank

0 0 communication has shifted markedly in the direction of tighter policy.

-4 -2 • Accordingly, we see less supportive policy paths across the 27 central

2021 2022 2023 2024 2025 2026 banks we track, with 17 following tighter trajectories than expected in late

*Headline, core, and energy inflation cover 15 economies.