We examined the sensitivity of global growth to the ongoing energy shock in several reports last week. Critical to the outlook, global spending on crude oil as a share of GDP is not historically high and is well below the levels that have triggered or contributed to previous economic downturns. Because the major countries/regions are much less oil-intensive than in the past, their economies should have greater resilience to an oil price spike than in past decades.
Moreover, the monetary and fiscal backdrop is very supportive, and the U.S. and global economy had solid momentum prior to the war. Thus, although the war is far from over, we expect the global economic expansion to persist barring a significant further rise in prices and prolonged supply problems.
