Emerging markets lead — geopolitics threaten
Emerging markets are expected to drive global growth in 2026, with India and Indonesia topping the list — but geopolitical shocks are a clear downside risk. Analysts warn the Iran‑Israel war and energy volatility could shave up to a percentage point off India’s FY27 GDP, Germany’s institutes cut 2026 growth to about 0.6%, and markets briefly rallied yesterday on hopes of a peace breakthrough even as March closed as the worst month for global equities since 2022. ( )
India is forecast to grow 6.6% in 2025 and 6.2% in 2026, while Indonesia is projected at 4.9% in both years. (visualcapitalist.com)) IMF chief economist Gita Gopinath said oil averaging about $85 a barrel for the year would shave roughly 0.5 percentage points off India’s growth, and prices nearer $100 could cut almost one full percentage point, with the IMF itself revising India’s FY26 estimate to 7.3% and FY27 to 6.4%. (ndtv.com)) HDFC Bank and other Indian analysts calculate that every 10% rise in oil prices could reduce India’s GDP growth by roughly 20–25 basis points, widening the current‑account deficit and pressuring the rupee. (economictimes.indiatimes.com)) Germany’s leading economic institutes slashed their 2026 growth forecast to 0.6% from 1.3% and trimmed 2027 to 0.9% from 1.4%, while raising inflation projections into the high‑2% range for 2026–27. (money.usnews.com)) Global markets jumped on hopes of de‑escalation — the Dow surged about 1,125 points and the Nasdaq climbed 3.8% — even as the S&P 500 closed March down roughly 5.3%, its worst monthly performance since 2022. (riotimesonline.com)) Reuters reported the market moves were driven by speculation of a pause in the Middle East conflict and noted Brent crude was set for a record monthly gain amid the disruption to energy markets. (money.usnews.com)) Moody’s Analytics warned that, if the Iran‑Israel war persists, India’s growth could fall nearly 4% below its baseline trajectory because of sustained energy and trade shocks. (newindianexpress.com))
