U.S. attacks on Iran are likely to keep oil prices elevated for some time (see Chart 2). This geopolitical component, together with the likely end of the downward cycle in international agricultural commodity prices, is expected to put upward pressure on inflation. As for iron ore, the start of operations at the Simandou mine—the world’s largest mining project, located in Guinea and led by Chinese state-owned consortia—has the potential to keep prices contained.
The U.S. attack on Iran now emerges as the main geopolitical risk factor. It is possible that, after a few weeks of conflict and higher oil prices, the situation will normalize. However, the risk has clearly increased, and the outlook must now incorporate a shock—albeit temporary—to global fuel prices.
GDP: The GDP dynamics will probably be characterized by a virtual stagnation from 2H25 into 1H26 and and acceleration thereafter. The recovery will depend upon the monetary policy easing cycle to be initiate in 1Q26. We believe infrastructure investents will remain contributing to improve potential GDP growth, which is probably around 3% per year.
