Page 12 - Policy Economic Report- June'26

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

Figure 2: Growth Outlook for Selected Emerging Market Economies (2025–2026)

Source: Haver Analytics and S&P Global Ratings.

Among major emerging economies, India and Vietnam are expected to remain the fastest-growing
economies in 2026, while growth is projected to moderate across several commodity-dependent and
externally vulnerable economies amid persistent inflationary pressures and tighter financial conditions.

Global Inflation Trends

Global inflation continued to moderate during the first half of 2026, reflecting the cumulative impact of
tighter monetary policies and easing food price pressures across several major economies. However,
inflationary risks remain elevated as geopolitical tensions, higher energy prices, trade disruptions, and
supply chain constraints continue to exert upward pressure on production and transportation costs.
According to the World Bank, although headline inflation is expected to decline gradually, the pace of
disinflation is likely to remain uneven across regions due to persistent external shocks and policy
uncertainty.

Energy prices continue to be the principal driver of global inflation risks. Renewed geopolitical tensions in
the Middle East have increased uncertainty in global oil and gas markets, contributing to higher fuel prices
and freight costs. These developments have raised input costs for manufacturing, transportation, and
logistics while also increasing inflationary pressures for energy-importing economies. The World Bank
cautioned that any prolonged disruption to global energy supplies or key maritime trade routes could
delay the return of inflation to central bank targets.

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