EM Macro Navigator Energy Price Rebound Risks Reviving EM Inflation Concerns

Economics Research 29 July 2026 | 9:06AM HKT

Energy Price Rebound Risks Reviving EM Inflation Concerns

n Re-escalation in the Iran conflict pushed oil prices over $100/bbl last week. Andrew Tilton | While Brent crude has receded to below $90/bbl on hopes of a near-term Goldman Sachs (Asia) L.L.C. de-escalation, the trajectory from here is far from certain. On balance, our Kamakshya Trivedi commodities research team sees near-term risks skewed to the upside, with | Brent potentially surpassing $120/bbl in 2026Q4 if escalation intensifies. Goldman Sachs International

Kevin Daly n Higher oil prices would likely revive investor concerns regarding the EM inflation | Goldman Sachs International outlook and policy rate path. Since the conflict started in February, inflation has Clemens Grafe been relatively subdued—partly because the impact of the energy supply shock | on global oil prices has been tempered by weaker Chinese import demand, Goldman Sachs International

strong American supply and the release of strategic petroleum reserves. But Sunil Koul | inflation has also been mitigated by a number of EM-specific factors, including Goldman Sachs International

the introduction of policy measures to stabilise domestic fuel prices, low food Goohoon Kwon, CFA | inflation, limited broadening of inflationary pressures, and the lagged effects of Goldman Sachs (Asia) L.L.C. prior EM FX strengthening. Andrew Matheny | n On balance, we believe these factors will continue to keep inflationary pressures Goldman Sachs International in check, but highlight several risks in the event of a sustained escalation Alberto Ramos scenario. These include limits to fiscal resources to support domestic fuel prices, | emerging signs of rising global food inflation, greater vulnerability among Goldman Sachs & Co. LLC

importers of LNG and refined fuel products, and potential FX weakening. Santanu Sengupta | n Given the heightened uncertainty and our view that risks remain balanced for the Goldman Sachs India SPL time being, we have not materially adjusted upward our inflation or rate forecasts Hui Shan | since hostilities re-escalated in early July. With few exceptions, our forecasts Goldman Sachs (Asia) L.L.C.

imply a more benign inflation and rate path than implied in market pricing. Farouk Soussa | Goldman Sachs International Recommended Trades and Conviction Views Danny Suwanapruti n Rates: Favour long-ends in INR and ZAR, which have improving fiscal trajectories | (or COP, which may join them) Goldman Sachs (Singapore) Pte

n FX: Short THB/INR, short EGP/USD, long TRY/NGN/KZT vs USD n Equities: Overweight Korea, Taiwan, China (A), Brazil, South Africa, Hungary

Investors should consider this report as only a single factor in making their investment decision. For Reg AC certification and other important disclosures, see the Disclosure Appendix, or go to

Goldman Sachs EM Macro Navigator

Energy Price Rebound Risks Reviving EM Inflation Concerns 3

Summary of GS EM Forecasts and Market Views 13

The EM Bookshelf: Recent GS EM Macro Research 19

EM Spotlight: EM Inflation risks 22

New Upside Price Risks Amid Red Sea Tensions 23

EM Food Inflation: Upside Pressures Globally, But Heterogeneous Local Exposure 24

How China Is Buffering the Global Energy Supply Shock 25

Goldman Sachs EM Macro Research Team 30