The dominos to watch in the second half of the year
Explore the critical economic dynamics shaping the second half of the year, including trade policy, energy markets, and global growth trends.
The second half of the year presents critical economic dynamics, particularly hinging on the durability of the US-Iran peace agreement. This pivotal factor could either foster energy-driven disinflation or trigger a second oil shock, influencing various interconnected risks.
Trade policy uncertainty remains a significant concern, with new tariffs expected to emerge, potentially raising US rates. The expiration of Section 122 tariffs and ongoing investigations into trade practices will likely contribute to persistent headwinds, regardless of geopolitical tensions in the Middle East.
Moreover, the global economy is projected to accelerate, with real GDP anticipated to rise by 3.1% annually in the latter half of the year, compared to an estimated 1.6% in the first half. Lower oil prices are expected to enhance disposable income, particularly in developing economies, while inflation is poised to moderate, although uncertainties persist.
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