A recent Reuters poll of nearly 500 economists indicates that the prospect of persistently high inflation in the global economy is rising. The poll, conducted from June 29 to July 27, shows that economists have mostly raised inflation forecasts and cut growth views as the war in the Middle East continues with no end in sight.

Inflation Forecasts

Economists raised their inflation forecasts for 39 of 50 major economies for this year compared with April, with many citing effects from the war. They also cut growth forecasts for 32 of them. The latest developments may create an even bigger challenge for many major central banks that had already spent years trying unsuccessfully to bring inflation down to target.

Hostilities in a region crucial to the world’s oil supply briefly pushed crude prices back above $100 a barrel last week. While energy prices eased after Washington paused its two-week campaign of air strikes on Iran, oil is still over 20% higher than before the war began in late February.

Global Growth

Artificial intelligence-related spending worth hundreds of billions of dollars is helping a handful of economies to grow strongly and has kept global growth forecasts steady across multiple quarterly surveys. The median was for 2.9% growth this year and 3.1% in 2027, unchanged from April.

Growth forecasts for the world’s two biggest economies, the U.S. and China, leading the AI investment boom, were unchanged from the respective 2.2% and 4.6% predicted three months ago. South Korea and Taiwan, both benefiting from the AI wave, led the GDP forecast upgrades for 2026.

Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.