Lower oil prices aren’t a gamechanger for the growth outlook

Each month Oxford Economics’ team of 450 economists and analysts updates our baseline forecast for 200+ countries using our innovative Global Economic Model. Fully linking individual country models through global assumptions about trade volume and prices, competitiveness, capital flows, interest and exchange rates, and commodity prices, our model provides a rigorous and consistent structure for forecasting and understanding the impact of economic shocks.

Below is just the top-level summary of our analysis of the latest economic developments.

• We’ve lowered our oil price forecast in response to the fragile truce between the US and Iran and the moderate pick-up in shipping traffic through the Strait of Hormuz. 
• We’ve nudged up our 2026 world GDP growth estimate by 0.1ppt to 2.5%, and we’ve increased the 2027 growth forecast by 0.1ppt to 3.2%.
• The willingness of the US and Iran to negotiate is a positive step towards a lasting resolution.

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