美银-全球经济周报：战争迷雾愈发浓重-Global Economic Weekly：The foggier war-20260327

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GlobalEconomicWeekly

Thefoggierwar

BofAGOBALRESEARCHBofASE

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BofASecuritiesdoesandseekstodobusinesswithissuerscoveredinitsresearch

reports.Asaresult,investorsshouldbeawarethatthefirmmayhaveaconflictof

interestthatcouldaffecttheobjectivityofthisreport.Investorsshouldconsiderthisreportasonlyasinglefactorinmakingtheirinvestmentdecision.

Refertoimportantdisclosuresonpage25to26.

GlobalLetter:Thefoggierwar

Thewardoesnotseemclosetoanend,withthemainpartiesapparentlystillfarfromreachingacompromise.Wethinktherewilllikelybeanimpactontheglobaleconomy

evenifthewarisoverinafewweeks,asitwilltaketimetonormalizeflowsand

productionofenergyproductsandderivatives.Theworldhasbecomelessoildependentovertime,butifthewarescalatesandbecomesprotracted,non-linearconsequencesofmuchhigherenergypricescouldbesignificant.Persistencewillbekeyfortheeconomy.

US:Higherdeficitsarelookingincreasinglylikely

DeficitrisksareskewedtotheupsideowingtotheIEEPArulingandtherisingcostsoftheIranwar.Tariffrefundsarelikelytobeanear-termhit,whileanyreductionintariffratesandwar-relatedspendingisalonger-termrisk.Collectively,theseriskscouldpushdeficitswellabove6%ofGDPnextyear.Ahigherdeficittrajectorycouldbringfiscal

sustainabilityandtheassociatedrisksforlong-endratesbackintofocus.

Euroarea:Framingthe“freshmemory”argument

The2022energyshockisstillfreshineveryone’smind.Thiscouldimplystronger

indirectandsecond-roundeffectsoninflation.Butthesameargumentmattersforthesensitivityoftherealeconomy,too.Thisrisksnon-lineargrowthresponses.

UK:WhatcanittakefortheBoEtohike?

Barforhikesislowerthanthoughtbefore,butcontextisdifferentfrom2022.Sohikes,ifany,arelikelytobemodest,unlessoilrisessharply.Undercurrentenergyfutures,riskofno2026cutswillrise,whileinsurancehikesmid-year(one/two)can’tberuledout.

Asia:Externalbalancetailwindsforenergyexporters

Energysupplyhastightenedsharplyoverthepastweeks.WhilemuchofAsiacouldfacegreaterexternalbalancepressures,energyexportersshouldseemeaningfulsupport,

primarilyvia.terms-of-tradegains.

EmergingEMEA:Oilexportersbackandstrongerthanever

WeexpectmajoroilexportersAngolaandNigeriatobethelargestbeneficiariesofaprolongedoilshock.Theregionisbetterpositionedtoabsorbtheshockvs2022:FXreservesarehighandmanygovernmentsrolledoutfuelsubsidies.NetoilimportersZambiaandKenyaremainthemostvulnerable.

LatinAmerica:DomRep–slowerthanexpectedrecovery

Thetourismsectorrecoveryispositivenewsforgrowth.However,therestofthe

economyisrecoveringataslowerpace.WecutourGDPgrowthforecastto3%astherecoverywilllikelybesluggishthisyear.Opportunityforreformsisfading.DomRepishighlyexposedtotheoilshock.Governmenthasroomtosupporttheeconomy,the

BCRDhaslessroomtoease.

27March2026

EconomicsGlobal

TableofContents

GlobalLetter2

US4

Euroarea7

UK11

Asia13

EmergingEMEA16

LatinAmerica18

Keyforecasts20

Detailedforecasts21

ResearchAnalysts27

ClaudioIrigoyen

GlobalEconomistBofAS

+16468551734

claudio.irigoyen@

AntonioGabriel

GlobalEconomistBofAS

+16467435373

antonio.gabriel@

GlobalEconomicsTeam

BofAS

SeeTeamPageforListofAnalysts

2GlobalEconomicWeekly|27March2026

BofAGLOBALRESEARCH

GlobalLetter

ClaudioIrigoyen

BofAS

AntonioGabriel

BofAS

Thefoggierwar

Asthewarmovestowardsthefifthweek,theprospectsdonotlookverypromising.TheUSandIranstillappeartoofaraparttoreachacompromise.ThereportednegotiationsonthebackofthedealtheUSputonthetablethisweekarestuck,andescalationis

morelikelythannot.

WithBrentbackto$108andrisingrisksofHouthiinvolvement,therewilllikelybean

impactontheglobaleconomy.Evenifthewarisoverinafewweeks,itwilltaketimetonormalizeflowsandproductionofenergyproductsandderivatives.Theglobaleconomyhasbecomelessoildependentovertime,butifthewarescalatesandbecomes

protracted,non-linearconsequencesofmuchhigherenergypricescouldbesignificant.

Attheriskofsoundinglikeabrokenrecord,thesizeandpersistenceoftheshockis

criticaltodetermineitsimpactandhowmuchofthestagflationaryshockwillbefeltasaninflationand/oragrowthshock.

Theanatomyofanenergyshock

Theworldeconomyislessdependentonoil,butifanythinghasbecomewaymore

sensitivetonaturalgasandfertilizers,whichrepresentamajorriskforEuropeand

developingeconomiesrelativetotheUS.Thisisanimportantdifferencerelativetopastoilshocks.Yes,theglobaleconomyislesssensitivetooilshocks,butitisnotonlyaboutoilanymore.TheIranwarisnotanoilshock–itisanenergyshock.

Assuch,anenergyshockhasanimpactoninflationandgrowththatfundamentally

dependsonenergydependency,financialfragility,energysensitivityandthepersistenceoftheshock.

Thesameshockimpactsmorenegativelyonaggregateincomeforenergyimporting

countries,asiteffectivelyactsasatransferfromenergyimportingtoenergyexportingcountries.Inotherwords,itrepresentsanegativetermsoftradeshock.Forthatreason,theUSismoreinsulatedthanEurope,Korea,India,ChinaorJapantothesameshock.

Moreenergysensitivecountriesaremoreheavilyimpacted.Sinceenergymarketsareinterconnectedandindirectlyimpactfoodprices,developingcountrieswithhigherfoodandenergysharesintheirconsumptionbasketsaremoreexposedtotheenergyshock.Sincegasisusedmoreheavilythancoalasaninputforelectricitygeneration,thisis

anothertransmissionchanneloffirstorderimportanceforEuropeandSoutheastAsia.

Anenergyshockisasupplyshockwithhugeimpactonrelativeprices.Asthepricesofenergy-intensivegoodsandinputsincrease,itactsasataxonconsumersand

companies,whichreducesrealincomeandprofits,hitsthespendingandinvestment

capacity,andputsdownwardpressureontherestofgoodsandservicesintheeconomy.

However,giventhestickinessofnominalprices,italsoshowsupashigherinflation,whichinevitablyleadmarketstopriceintightermonetarypolicyandfinancial

conditions,puttingdownwardpressureoneconomicactivity.

Hereiswherefinancialfragilitycomesintoplay.Moreleveragedeconomiescomeintofinancialstressmorequickly.Itisparticularlyimportanttocomparethisenergyshockvspreviousonesfordevelopedeconomieswithlimitedroomforfiscalstimulusandmoreleverageintheprivatesector,asisthecaseoftheUSandUK.

Showmethesizeandthepersistence

Thefinalaspecttodeterminetheimpactoftheshockoninflationandgrowthishowbigandhowpersistentitis.Eventhoughwetendtothinkofsupplyshocksasstagflationary

GlobalEconomicWeekly|27March20263

BofAGLOBALRESEARCH

innature,thatishigherinflationandlowergrowth,thesequencingoftheimpactoftheshockisafunctionofhowtemporaryvspermanenttheshockisaswellastheexpectedsizeoftheshock.

Energyshockstendtoimpactinflationquickly,ashigherinputcostsarepassedthrough.

Sinceusuallythesewar-drivenshocksareperceivedastemporaryatthebeginning,consumerspendingisquiteinelastic,somarketsclearthroughhigherpricesand

economicactivityisnotheavilyimpacted.

Oncetheshockisexpectedtohaveamorepersistenteffect,consumerandbusinessconfidencedrops,companiesadjustproductionlower,layoffsstart,andaggregate

spendingbecomesmoreelastictoprices.Thisiswhentheshockmorphsfromapurelysupplyshockintoademandshockandeconomicactivityismoreimpactedwhile

inflationstartstopeak.

InthecaseoftheUS,excessiveleverageinsomesectors(startingwithgovernmentdeficits)andnegativewealtheffectsasfinancialandrealassetsrepriceintoamorepermanentshock,couldexacerbatethedropinaggregatespending.

Marketsarenotoverfocusedoninflation

Thereisthisnarrativethatmarketsaretoofocusedoninflationwhileignoringtheimpactoftheenergyshockoneconomicactivity.Yes,marketsarepricinghigher

inflationandtightermonetarypolicythanfiveweeksago.Butthisisnotevidenceofmispricedfundamentals.

Instead,itisasimplereflectionofthemarket’sexpectationofaquickresolutiontothewar.Inotherwords,theexpectationthattheshockwillbetemporaryandlimitedinsize,withatemporaryincreaseininflationthatwouldforcetheFedtoremainonholdanditwouldnotbepersistentenoughtocreatesignificantdestructionofeconomicactivity.

Marketsmightbeoverlyoptimisticabouttheoutcomeofthewar.Butthepricingisconsistentwiththeconsensusviewthatthewarwillberelativelyshort-livedand

eventuallyenergypriceswillstarttonormalizebeforetheendofthespring.

4GlobalEconomicWeekly|27March2026

BofAGLOBALRESEARCH

US

StephenJuneau

BofAS

Addingdeficitstothewallofworry

•DeficitrisksareskewedtotheupsideowingtotheIEEPArulingandtherisingcostsoftheIranwar.

•Tariffrefundsarelikelytobeanear-termhit,whilewar-relatedspendingisa

longer-termrisk.Togethertheycouldpushdeficitswellabove6%ofGDPnextyear.

•Ahigherdeficittrajectorycouldbringfiscalsustainabilityandtheassociatedrisksforlong-endratesbackintofocus.

Completereport:USEconomicWeekly:Addingdeficitstothewallofworry27March2026

Deficitriskshaveshiftedhigher

MarketshaverespondedquicklytotheinflationrisksposedbytheongoingIranwar.Asaresult,marketparticipantsarepricinginhikesbytheFedthisyear,andtheyieldcurve

hasflattened(Exhibit1).Anotherriskthewarposesthatmarketsmaynotyetbefullypricinginisadeteriorationinthedeficittrajectory.Thewarandtariffrefundsposemeaningfulupsiderisktoourdeficitforecasts,whicharecurrently$1.875tn(5.8%ofGDP)inFY26and$1.925tn(5.7%ofGDP)inFY27.

Shouldthetrajectoryofdeficitsshiftmateriallyhigher,fiscalconcernscouldre-emerge.Thatwouldlikelyputupwardpressureonlong-endratesandraiseborrowingcostsforbusinessesandhouseholds.

Exhibit1:TheyieldcurvehasflattenedsincethestartoftheIranwarUSTreasury2y-10yyieldcurve(bp)

120

StartofIran

80

40

0

-40

-80

-120

Jan-23Jun-23Nov-23Apr-24Sep-24Feb-25Jul-25Dec-25

Source:Bloomberg

BofAGLOBALRESEARCH

war

Exhibit2:OurdeficitforecastsarecurrentlybelowconsensusDeficitforecasts($bn)

FY26FY27

Source:USTreasury,BofAGlobalResearch

BofAGLOBALRESEARCH

2250

2100

1950

1800

1650

25thpercentile75thpercentile

BofAMedian

Ourforecastsarecurrentlybelowconsensus

Ournear-termdeficitforecastshavebeenatthelowerendofconsensusforsometime.Indeed,wearecurrentlybelowthe25thpercentileofforecastsforFY26andFY27,

accordingtothelatestRefundingdocumentsfromFebruary(Exhibit1).

Priortorecentevents,wewerecomfortablewithourbelow-consensusforecastsfortworeasons.First,theyear-to-datedeficithadbeentrendingbelowlastyear’slevel.ThroughFebruaryitisdown$142bny/y,largelyduetoasurgein“other”incometaxrevenue,

drivenbycapitalgainsaswellasdelaysinestimatedpaymentsfromnaturaldisasters

GlobalEconomicWeekly|27March20265

BofAGLOBALRESEARCH

lastyear.Second,CBO’snear-termdeficitprojectionsfromearlyFebruarywerevery

muchinlinewithourownexpectations.WhileCBOdoesnothaveaperfectforecastingrecord,it’sgoodcompanytoshare.

Tariffrefundsareaknownupsiderisk,timingisuncertain

However,CBO’sprojectionsandourownarestalegivendevelopmentsoverthelasttwomonths.First,CBOandourownforecastdonotyetincorporatetariffrefundsintothe

outlook.WenowknowthattheserefundswillhappenbasedonrulingsfromtheCourtofInternationalTrade.

Estimatesofthesizeofthetariffrefundsarelarge,at0.5-0.6%ofGDP.Thecourtis

allowingtheadministrationtimetosetuptherefundprogramandprocess,butthequickrulingsuggeststhattheserefundscouldhitthedeficittowardstheendofthisfiscal

year(Sep2026)andthroughoutFY27.WehopetolearnmoreonthetimingandprocesswhenCustomsandBorderProtectionreportsitsprogresstothecourtsonMarch31.

Giventherelativelyquickactionbythecourtandthecooperationbytheadministration,weexpectthatthebulkoftherefundswilllikelygooutinFY2027.SothatcouldeasilypushtheFY27deficitabove6%ofGDP.Thiswouldamounttoanimpliciteasingofthestanceoffiscalpolicy.

Refundsaremoreofaone-offforthedeficit.Themorepersistentriskdependson

whereeffectivetariffrateslandafterSection122tariffsexpireonJuly24,2026.The

recentlyannouncedSection301investigationsinto60+countriessuggestthe

administration’sgoalistofullyreplicateIEEPAtariffswiththemorelegallydurable

Section301authority.Thatsaid,weseetworeasonswhytariffratescouldlandlower

thanwheretheywerebeforetheIEEPAruling:1)Section301requiresapubliccommentperiod,whichtypicallyleadstoexclusionsofkeyitems,and2)midtermelectionscouldgivetheadministrationsomepauseinimplementingtheSection301tariffsquickly.

Thecostsofwarposesabiggerupsiderisk

Inadditiontorecentchangesaroundtariffs,thewarwithIranposesameaningfuland

perhapsmoredurableupsiderisktothedeficittrajectory.TheDepartmentofDefense

informedCongressthattheactionstakenoverthefirstsixdaysofthewarcost$11.3bn,andSecretaryHegsethhasaskedfor$200bninsupplementalfunding.

Importantly,Congresswillneedtoapproveanysupplementalfundingfordefense.ThishelpsexplainwhytalksofasecondreconciliationbillhavepickedupinrecentdaysasSenateDemocratsareunlikelytosupportmoredefensespendingwithoutsomewarlimitsbeingplacedonthePresident.

IfRepublicanscancobbletogethersupportforaparty-linereconciliationbillthat

includesmoredefensespending,itwouldnotsurpriseustoseeotherprovisions

includedthatwoulddriveupthecost.Forexample,Congresscouldsuspendthegastax,anideathePresidenthassupported,toprovidesomerelieftohouseholds.Thiscould

addaround$40bn/yeartothedeficit.Republicansincompetitivemidtermraceswouldpresumablypushformoresignificantconsumerrelief.

Inthinkingaboutthedeficitimpactofapotentialreconciliationbill,anyconsumerreliefislikelytobeimmediateduetothemidterms.Basedonpriorsupplementalbillsfor

UkraineandIsrael,wethinkallocatedincreasesinthedefensebudgetwouldtaketimetofullybespent(Exhibit3).

Thatsaid,thecostsofwarcouldchangesignificantlyifthewarcontinuesforlongerthanexpectedandifitinvolvesactualtroopsontheground.Forexample,thecostsoftheAfghanistan,Iraq&Syriawarsaveragedmorethan$100bn/yearin2025$(Exhibit4).ThatwouldlikelyshiftthenarrativeinmarketsbacktoconcernsoverdebtlevelsintheUSandcouldpressurethelongendofthecurvehigher,givenlimiteddemandandtheneedtogrowcouponissuanceearlierthancurrentlyexpected.

BofAGLOBALRESEARCH

6GlobalEconomicWeekly|27March2026

Exhibit3:Whilefrontloaded,supplementaldefensebillsin2022and2023werespentoverseveralyears

EstimatedoutlaysbySupplementaldefensebill($bn)

40

35

30

25

20

15

10

5

0

FY20221stSupplemental

FY20222ndSupplemental

FY20231stSupplemental

FY20232ndSupplemental

202220232024202520262027202820292030203120322033

Source:CongressionalBudgetOffice.Note:Figuresfor2026andbeyondareCBOprojections.

BofAGLOBALRESEARCH

Exhibit4:Ifpastisprecedent,thecostsoftheIranwarcouldincreasesignificantly

EstimatedcostforthewarsinAfghanistan,IraqandSyria(2025$)

300

AfghanistanIraq&Syria

250

200

150

100

50

0

2021201820152012200920062003

Source:DepartmentofDefense,BofAGlobalResearch

BofAGLOBALRESEARCH

Bottomline:Higherdeficitsarelookingincreasinglylikely

Whilewehavebeenconstructiveondeficitscomparedtoconsensus,therisksaround

ourdeficitforecastshaveclearlytiltedtotheupside.Tariffrefundsalonecanpush

deficitsabove6%ofGDPinthenearterm,butthemoredurableupsideriskistherisingcostoftheIranwar.Iftheserisksmaterialize,marketsparticipantsarelikelytostart

focusingmoreonfiscalsustainability,whichshouldpressurelong-endrates.

GlobalEconomicWeekly|27March20267

BofAGLOBALRESEARCH

Euroarea

ChiaraAngeloni

BofAEurope(Milan)

RubenSegura-Cayuela

BofAEurope(Madrid)

Framingthe“freshmemory”argument

•The2022energyshockisstillfreshineveryone’smind.Thiscouldimplystrongerindirectandsecond-roundeffectsoninflation.

•Butthe“freshmemory”argumentmattersforthesensitivityoftherealeconomytotheshock,too.

•Consumersaremoresensitivetouncertainty,corporatehealthisfarfromcomfortable,thelabourmarketisshaky.Thisrisksnon-linearresponses.

Completereport:EuropeEconomicWeekly:Downmemorylane27March2026

“Freshmemory”,differentstartingpoint

Thesedays,asattentionturnstoidentifyingthecontoursoftheshocktriggeredbytheIranwar,parallelswiththe2022energyshockaremultiplying.Lastweek,weheardfromLagardethat,because2022shockisstillfreshineveryone’smemory,thespeedand

magnitudeofthetransmissiontodaydifferfromthoseobservedfouryearsago.We

agree.However,Lagardeplacedparticularemphasisontheriskthathigherenergycostscouldfeedintocoreinflationthroughindirectandsecond‑roundeffects(viawagesandinflationexpectations)givenmemoriesofinflationarealotfresherthantheywerein

2022(seereportEuroAreaWatch:ECBreview:balancedatfirstsight).Thatisariskworthwatchingcloselyinthenextfewweeksandmonths.

Butthereareotherreasonswhytherecentmemoryofalargeenergypriceshockcouldplayadisproportionateroleintheoutlookbeyondinflation.Thosememoriescouldalsoexplainwhytheriskofnon‑linearitiesintheshocktransmissiontotherealeconomyissomethingweneedtomonitorclosely.Theserisksapplytoboththedemand

(consumers)andsupplyside(companies)andcanplayanimportantrolenotonlyforthenear-termoutlookbutalsoforthemedium-termone,evenforinflation.

Also,the“freshmemory”argumentmustbeassessedinthecontextoftoday’sbroadermacroeconomicbackdrop.Thestartingpointoftheeconomyisverydifferent:

consumersshowanincreasedpreferenceforprecautionarysaving,andcorporatevulnerabilityremainswelloutsideany“comfortzone.”

Wetaketheopportunitytoshedlightontheissue,startingfromthepremisethatthechartsbelowbelongtothe“oldworld,”i.e.,thepre‑Iran‑warenvironment.Evenso,weregardthemasusefulforframingthechannelsandmagnitudeofthisnewshock.

Theconsumerside:whenindoubt,save

Ourreadersarefamiliarwiththeprecautionary-savingargument:whenfacedwith

uncertainty,Euro-areaconsumersrebuildtheirprecautionarybuffers.Wehaveshown

beforethatthisheightenedsensitivitytouncertaintyhasbeenapersistentfeaturesincethepandemicyears(seereportEuropeEconomicWeekly:Walkingonatightrope).Itis

truethattheelevatedsavingsaccumulatedsince2020leaveEuro-areaconsumersinarelativelyresilientbalance-sheetpositionwhenconfrontedwithanewenergyshock,andtheECB’srecentcompositeindicators1ofhouseholdfinancialhealthpointtogenerallycomfortablelevelsthesedays.

Butthisalsoimpliesthat,aspreviousshocksarestillfreshinconsumers’minds,anewshockcouldleadtoabruptchangestospending.TheMarchdeclineinconsumer

1See“Elevatedsavingsbolsterhouseholdresilience”sessioninECB’s“FinancialStabilityReview”,Nov2025

8GlobalEconomicWeekly|27March2026

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sentimentdataseemstounderpinourconcern.Thisviewisparticularlyrelevantinan

environmentwhereuncertaintyisconcentratedonthepriceoutlook.Recallthat

uncertaintyandpricedevelopmentsnowplayalargerroleinshapingsavings

expectationsamongEuro-areaconsumersthantheydidbefore2020(Exhibit1).Andthestartingpointforpriceuncertaintyisalreadynotablyhigh(Exhibit2).Anothershiftin

thepricelevelcouldeasilystructurallyincreasethechronicinsufficiencyofaggregatedemandintheregion.Putdifferently,consumptioncouldlookweakerthanusualintheinitialphaseoftheshock,butrecoverlessthereafter,too.

Exhibit2:SurveydispersionforEuro-areaconsumersnevercorrectedlowerafterthe2025surge.EvenbeforetheIranwar,disagreement/confusiononpriceoutlookwasatthehighestsincepost-energyshockDispersionindicators(FW-DISP)forforward-lookinganswersacross

consumers

Exhibit1:Above-2029savingsexpectationshavebeenmostlydrivenbyuncertaintysinceend-2024(lightbluebar).Thelegacyoftheenergypriceshockalsoincreasedthepropensitytosave.

150

140

130

120

110

100

90

80

Savingsexpectationsdecomposition–allEuroareaconsumers.Cumchangeinsavingexpectationsvs2019

EAFWDISPConsumers

——EAFWDISPPriceexpectations

20102012201420162018202020222024

Source:EUCommission,BofAGlobalResearch.Seeforallthedetailsonmethodologythispiece:EuroAreaViewpoint:Whenuncertaintymeetsconfusionanddisagreement

BofAGLOBALRESEARCH

Source:ECCommission,BofAGlobalResearch.Seeforallthedetailsonmethodologythispiece:EuropeEconomicWeekly:Walkingonatightrope

BofAGLOBALRESEARCH

8

4

0

-4

-8

2020

Uncertainty(inclEPU)Pastinflation

OthersavingdriversResiduals

Savingexpectations20212022

2023

2024

2025

202

EnergyshockscomewithK‑shapedscars

Energyshocksalsogenerateasymmetricpurchasingpowerlossesacrossincomegroups.Exhibit3illustratestheinflationdifferentialsfacedbylower‑andhigher‑income

households,basedonincome‑specificconsumptionbaskets.The2022energycrisis

triggeredasharpsurgeinpricesthatdisproportionatelyaffectedlower‑incomegroups,leadingtolastingreal‑incomelosses.

AswearguedinourGlobalMacroYearAhead(seereportGlobalMacroYearAhead:

2026:Attitudedeterminesaltitude),intheEuroarea,theK-shapeeconomygenerated

downsiderisksevenbeforeweconsiderthenewshock.Wealthremainshighly

concentrated,butwealtheffectshaveplayedasmallerroleinK-shaperecovery

dynamicssince2020.Excesssavingsaccruedduringpandemicyearswerelargely

confinedtothewealthiestquintilewhilethe2022inflationsurgedisproportionately

affectedlower-incomehouseholds,erodingrealincomes.Incomelossesandhigherpricedynamicsledtomorepessimisticlow-incomeconsumers,accompaniedbyagreater

precautionarysavingattitude.Monetarytighteningamplifiedthesedivergences,asliquidity-constrainedlowerearnersmoreexposedtohigherborrowingcosts.

Althoughinflationgapshavenarrowedrecentlyandassumingthatthecompositionof

consumptionhasnotchangedmuchacrossEuro‑areahouseholdssince2020(thelatestavailableEurostatbreakdown),thesameK‑shapeddynamicsarelikelytoapplytothis

newshock,potentiallyincreasingthesensitivityoftheeconomytoit.Exhibit4zoomsinontheconsumptionweightdifferentialfacedbylower‑versushigher‑incomegroupsintheaggregatecategory“Housing,water,electricity,gasandotherfuels”acrossthemainEuro‑areacountries.

BofAGLOBALRESEARCH

GlobalEconomicWeekly|27March20269

Exhibit3:Duringtheenergycrisis,low-incomegroupsfacedmuchhigherinflation.Inflationdifferentialshavecorrectedlately

InflationdifferentialQ1vs5Qincomegroups

Exhibit4:K-shapedynamicsintheenergyshockprorogationsacrossincomegroups

Consumptionweightdifferentialinthecategory“Housing,water,electricity,gasandotherfuels”,Q1vs5Qincomegroups

43.5 32.5 21.5 10.5 0-0.5 -1-1.5

Miscellaneousgoodsandservices

Restaurantsandhotels

mmEducation

Recreationandculture

Communications

TransportmmHealth

Furnishings,HHequipmentandmaintenance

Clothingandfootwear

Alcoholicbeverages,tobaccoandnarcotics

Housing,water,electricity,gasandotherfuels

Foodandnon-alcoholicbeverages

16%

12%

8%

4%

0%

EADEFRITES

2024

2025

2026

20192020202120222023

Source:Eurostat,BofAGlobalResearch

BofAGLOBALRESEARCH

Source:Eurostat,BofAGlobalResearch.Weconstructincome-specificinflationprofilesusingtheEurostat’sstructure