Page 7 - Policy Economic Report - September 2025

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

Figure 2: Real GDP growth projections for 2024,2025,2026

Source- OECD

Global Inflation
Inflation in most G20 economies is projected to fall as economic growth and labor markets continue to
soften. Headline inflation is expected to decline from 3.4% in 2025 to 2.9% in 2026, while core inflation in
advanced G20 economies remains broadly stable, easing only slightly from 2.6% to 2.5%.

In the United States, the increase in effective tariff rates will further boost inflation, with the rate of pass-
through to final goods prices assumed to strengthen as businesses become less willing to absorb the rising
cost of imported goods.

In the euro area, inflation is anticipated to remain subdued, while the normalization of food prices in Japan
will contribute to inflation moving back to the central bank target in 2026.

Significant further disinflation in Argentina and Türkiye are key factors, but inflation is also anticipated to
moderate in Brazil and Mexico. In contrast, a rise in inflation is projected for Indonesia, as past exchange
rate depreciation feeds into domestic prices.

In China, inflation is expected to gradually increase from its current very low level, partly reflecting the
imposition of higher tariff rates on goods imported from the United States.

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