Sunday, May 3, 2026

Economic Outlook: Global Economy in the Shadow of War

                  For about two decades I have had this activism for better political education, for more democracy and development, for more respect for human rights and better justice,  I have a YouTube channel, here is the link.   https://www.youtube.com/@lucianofietto4773/videos. Since the creation of this channel its visualization counter doesn't work, the same has been happening with the counter of this blog since its creation in 2010. Never a human rights defender was so much harmed in so many ways and for so long time. This persecution to harm me can't carry on, the Brazilians authorities must do someting, I've to have my digital rights respected. This post is a summary of the book with the title above published in April 2026 at https://www.imf.org/-/media/files/publications/weo/2026/april/english/text.pdf

 Once again, the global economy is threatened with being thrown off course, this time by the outbreak of war in the Middle East. Over the past year, headwinds from higher trade barriers and elevated uncertaintyhave been offset by tailwinds from technology-related investment, accommodative financial conditions, including a weaker US dollar, and fiscal and monetary policy support. The Middle East conflict presents a significant counterforce to these tailwinds through its impact on commodity markets, inflation expectations and financial conditions. Under an adverse scenario with larger and more persistent increases in energy prices, global growth would slow further to 2.5% in 2026, and inflation would reach 5.4%. Larger fiscal deficits and increasing public debt could put pressure on long-term interest rates and , in turn, on broader financial conditions. In Latin America, growth is projected to remain stable at 2.3% in 2026 and 2.7% in 2027. In Brazil, growth is projected to moderate to 1.9% in 2026 and 2.0% in 2027. The war is expected to have a small net positive effect in 2026, as a result of the country being a net energy exporter. In 2027, slowing global demand, higher input costs (including of fertilizers), and tight financial conditions are expected to domnate, reducing growth. Beverages prices plunged by 24.8%, led by 57.4% drop in cocoa prices as favourable weather in West Africa boosted supply and inventories while global demand softened. Coffee prices fell by 9.9% following a record Brazilian harvest and improving supply conditions in Vietnan. In contrast to beverages prices, food prices are expected to increase by 6.0% in 2026. Defense spending is increasing rapidly. Over the past five years, about half of the world's countries have increased their military budgets, and arms sales by the world's largest defense firms have doubled in real terms over two decades. 

Below the GDP growth in 2025, from the highest growth to the smallest growth.  The first column is for countries in the American continent, and the other is for some countries in the rest of the world. As previously forecasted, Guyana had the the second highest GDP growth of the world last year, only the growth in South Sudan was greater. But Guyana had the highest growth in 2021, 2022 and 2023. Congratulations to our neighboring country.

GDP growth 2025 in PanAmerican countries                           Rest of the World
Guyana        19.3%                                                                    Libya    15.9%   
Paraguay       6.0%                                                                     Ireland      12.3%
Nicaragua         4.9%                                                                    Ethiopia       9.2%
Costa Rica        4.6%                                                                      India      7.6%                                  
Argentina           4.4%                                                                   Vietnam       8.0%
Panama            4.4%                                                                      China       5.0%
Guatemala         4.1%                                                                   Philippines      4.4%                                      
Ecuador            3.7%                                                                      Turkiye       3.6%
Honduras           3.7%                                                                     Spain        2.8%
Peru              3.4%                                                                       Australia     2.0%
Colombia           2.6%                                                                    Portugal     1.9%
U.S.A.           2.4%                                                                     Netherlands     1.9%
Chile            2.3%                                                                         Switzerland       1.3%
Brazil            2.3%                                                                               U.K.      1.3% 
Canada           2.1%                                                                         Japan      1.2%
Uruguay           1.8%                                                                          Russia      1.0%
Venezuela         1.5%                                                                       France       0.9%
Mexico           0.6%                                                                           Italy        0.5%
Bolivia            -1.2%                                                                       Germany      0.2%