Issue Risks to world growth from Middle East talks, AI profitability concerns and rising bond yields

Summary

Global inflation climbed on the energy price shock and has since eased somewhat, but high oil prices amid Middle East uncertainty keep inflation risk alive. The Bank of Korea identifies several forces that could push world growth above or below its baseline. They include whether negotiations over the Middle East make progress, doubts about the profitability of AI investment and a possible cut in spending, and greater volatility in global financial markets. Widening fiscal deficits in the United States, Europe and Japan, together with inflation worries, could also lift market interest rates. Higher rates of that kind are cited as a possible constraint on global growth.