Page 9 - Policy Economic Report - Feb 2026

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

Global inflation

Global headline inflation edged up last year, to an estimated 3.2 percent, reflecting a pickup in some
advanced economies, while it generally moderated in EMDEs. Global core inflation eased gradually,
reflecting slowing wage growth as labor demand softened. Goods price inflation rose modestly in
advanced economies in 2025, and more so in the United States where higher tariffs came into effect. In
contrast, goods inflation declined in many EMDEs as demand for tradables eased following intensive
stock-building earlier in the year.

Services price inflation continued to outpace goods inflation last year, though it has eased alongside
weakening labour markets. The adoption of new AI-related technologies in some service companies
appears to have boosted productivity, suggesting the potential for further reduction in price pressures,
particularly in advanced economies. Going forward, global inflation in 2026 is projected at 2.6 percent,
0.3 percentage point lower than previously expected. However, the outlook remains uncertain because
of the magnitude and scope of trade policy shifts. In the United States, the inflationary impact of tariffs is
projected to peak in early 2026, as the passthrough of tariff increases reaches completion, while inflation
in other advanced economies is anticipated to soften amid slowing activity and moderating external
demand.

Figure 4: Global CPI inflation projections

Source - World Bank

2. New Skills and AI Are Reshaping the Future of Work
As AI and digital technologies transform today’s workplace even those at the forefront of innovation are
not immune to disruption as recent job cuts at major technology companies show.

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