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EBRD Cuts Growth Forecast as Middle East Conflict Drives Inflation and Energy Shock

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Economic growth across regions covered by the European Bank for Reconstruction and Development (EBRD) is set to slow more sharply than previously expected, as rising energy prices linked to the conflict in the Middle East push inflation higher and weaken momentum across emerging markets.

In its latest Regional Economic Prospects report, the EBRD said aggregate growth across its regions is now projected at 3.1% in 2026, down from 3.4% in 2025 and 0.5 percentage points below its earlier February forecast. Growth is expected to recover modestly to 3.6% in 2027, although that too has been revised slightly lower.

The bank, which finances projects across central and eastern Europe, Central Asia, the Middle East and North Africa, said the outlook has been disrupted by surging oil and gas prices, instability in shipping routes through the Strait of Hormuz, and widening energy cost gaps between Europe and the United States.

The EBRD estimated that growth across its economies slowed to 2.9% in the first quarter of 2026, with weaker-than-expected performance recorded in several large markets including Egypt, Kazakhstan, Romania, Turkey and Ukraine.

Chief economist Beata Javorcik said the latest shock has hit already fragile economies. “The conflict in the Middle East has delivered a new shock to regions already navigating weakness in manufacturing industries and fragile fiscal positions,” she said.

Inflation has also reaccelerated after easing late last year. The EBRD reported that average inflation across its regions rose to 6.4% between February and April 2026, an increase of 1.2 percentage points. Higher energy and food costs were identified as the primary drivers, while currency depreciation against the US dollar added further pressure in several economies.

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The bank warned that inflation could remain elevated for longer than previously expected, particularly in emerging markets where households spend a larger share of income on food and energy compared with advanced economies.

To cushion the impact, nearly two-thirds of EBRD economies have introduced measures such as fuel price caps, tax relief and targeted subsidies. However, the bank cautioned that these steps are placing additional strain on public finances at a time when borrowing costs are already rising.

Higher energy bills, tighter global financial conditions and elevated debt levels are compounding fiscal pressures across many member countries.

Looking ahead, the EBRD warned that a prolonged conflict could further disrupt supply chains, push energy prices higher and weaken investment flows. Such developments, it said, would weigh on already subdued growth prospects across its regions.

For now, policymakers face a difficult balance between supporting households and maintaining fiscal stability, as external shocks continue to reshape the economic outlook.

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Anthropic Moves Toward IPO, Signaling Possible First Major Public Listing in Generative AI Race

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June 2, 2026

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Artificial intelligence company Anthropic has taken a significant step toward a public market debut, filing confidential paperwork with US regulators in a move that could see it become the first major generative AI firm to list on Wall Street.

The company confirmed on Monday that it had submitted a draft registration statement to the US Securities and Exchange Commission for a proposed initial public offering of its common stock. Anthropic said the filing allows it to move forward with an IPO once regulatory review is complete, while stressing that timing, valuation and share pricing will depend on market conditions.

The development places Anthropic in a potential lead position over rivals OpenAI and Elon Musk’s xAI-backed ventures, as leading AI companies edge closer to public markets amid intense investor interest in the sector.

“I think we were all expecting OpenAI to go first, so it was a little bit surprising,” said Patrick Corrigan, a law professor at Notre Dame University who studies IPOs. He noted that a near-simultaneous arrival of major AI listings could give investors a direct basis for comparison. “There seems to be a bit of a first-mover’s advantage here,” he added.

Founded in 2021 by former OpenAI researchers, Anthropic has rapidly grown into one of the most valuable private technology firms. The company recently reported raising $65bn in private funding, giving it a valuation of around $965bn. That figure places it ahead of OpenAI’s most recently disclosed valuation of about $852bn following a major fundraising round earlier this year.

Anthropic also said it is now generating an annualised revenue rate of $47bn, driven by growing enterprise demand for its Claude AI models, which are used for coding, content creation and workplace automation. The company released its latest model, Claude Opus 4.8, last week, highlighting improvements in software development and professional applications.

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The IPO filing arrives during a broader resurgence in global listing activity. According to KPMG, companies raised $42.6bn through 251 IPOs in the first quarter of 2026, a 45% increase year on year, with investors favouring fewer but larger deals. Analysts say artificial intelligence and space technology firms are expected to dominate upcoming listings.

Industry observers suggest Anthropic’s move could accelerate IPO plans across the AI sector. Wedbush Securities analyst Dan Ives described the development as a potential catalyst for renewed activity in public markets, where technology listings have been subdued in recent years.

However, concerns remain over valuations and profitability across leading AI companies, which continue to invest heavily in computing infrastructure and model development without sustained earnings.

Some analysts compare the current wave of AI enthusiasm to the early internet era, when rapid innovation produced both long-term winners and high-profile failures. While optimism remains strong, questions persist over whether market expectations are running ahead of underlying financial fundamentals.

For now, Anthropic’s filing marks a pivotal moment in the competition among leading AI firms, setting the stage for what could become one of the most closely watched IPO races in recent technology history.

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China’s Factory Growth Stalls as Energy Shock and Weak Domestic Demand Weigh on Economy

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June 1, 2026

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China’s manufacturing sector showed little sign of expansion in May, with official data indicating activity slipping to its weakest level in three months as global energy disruptions and soft domestic demand continue to test the resilience of the world’s second-largest economy.

According to figures released by the National Bureau of Statistics and the China Federation of Logistics and Purchasing, the official manufacturing purchasing managers’ index (PMI) fell to 50 in May, down from 50.3 in April. The reading sits exactly at the threshold that separates expansion from contraction, reflecting a sector that is no longer clearly growing.

Behind the headline figure, the underlying data pointed to further weakness. New orders dropped to 49.9, slipping back into contraction territory after briefly expanding the previous month. Production eased to 51.2, while raw material inventories fell to 48.6, suggesting firms are becoming more cautious about future output.

Not all segments moved in the same direction. High-tech manufacturing and equipment manufacturing offered some support, rising to 52.9 and 52.1 respectively. Officials said these areas continued to benefit from ongoing industrial upgrading and targeted policy support, even as broader demand softened.

The slowdown comes at a time when global energy markets remain under strain following the war in Iran and disruptions in the Strait of Hormuz, a key route for global oil shipments. The crisis has pushed energy prices higher and created volatility across supply chains, although China has so far been partially insulated.

Beijing’s large strategic reserves, estimated at around 1.4 billion barrels, along with increased reliance on coal and accelerated investment in renewable energy, have helped soften the immediate impact. Analysts at HSBC noted that China remains “relatively more shielded” compared with other Asian economies due to its diversified energy structure.

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However, economists warn that prolonged disruption could still filter through to production costs and industrial activity over time.

The bigger concern for policymakers remains domestic demand. A prolonged downturn in the property sector has weakened household confidence and spending. Retail sales growth slowed sharply in April, prompting HSBC to cut its 2026 forecast for China’s retail expansion to 2.8%, down from a previous estimate of 5.2%.

While exports have remained relatively resilient—particularly to Europe and Southeast Asia—shipments to the United States have declined over the past year. Analysts say external demand is now doing most of the heavy lifting for Chinese growth.

Beijing has set a 2026 growth target of between 4.5% and 5%, its lowest in decades. Economists at Morgan Stanley say the target remains achievable but caution that global oil volatility and weak consumption will be key risks.

Recent diplomatic engagement between the United States and China has offered some optimism for trade stability, but analysts say any recovery in manufacturing will depend on whether domestic demand can regain momentum in the months ahead.

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Meta Expands Beyond Advertising With New Paid Subscription Plans Across Apps

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6 days ago

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May 28, 2026

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Meta has launched a new set of paid subscription services across its major platforms, including Facebook, Instagram and WhatsApp, in a significant step toward reducing its reliance on advertising revenue and building a broader digital services business.

The rollout introduces Facebook Plus, Instagram Plus and WhatsApp Plus to global users, alongside early-stage subscription tests aimed at businesses, content creators and artificial intelligence products. The announcement was made by Meta’s head of product Naomi Gleit in a video shared on Instagram, confirming that the company is expanding paid features across its ecosystem.

The new services fall under a broader umbrella initiative called “Meta One”, which the company said will eventually house a range of subscription products. Meta also confirmed that it is testing additional paid offerings for creators, businesses and users of its AI tools, signalling a deeper shift into subscription-based revenue streams.

According to reports citing AFP, Instagram Plus and Facebook Plus will be priced at around $3.99 per month, while WhatsApp Plus will cost approximately $2.99 per month. These plans will provide enhanced functionality, including expanded analytics tools, improved audience insights, story engagement tracking and greater profile customisation options.

WhatsApp Plus will focus more on personalisation features, offering users premium stickers, custom ringtones and redesigned themes for the messaging platform.

Meta shares rose 3.7 percent following the announcement, reflecting investor confidence in the company’s push toward diversified revenue sources at a time of rising costs linked to artificial intelligence development. The company has projected capital expenditure between $125 billion and $145 billion this year, with a large portion directed toward AI infrastructure and data centre expansion.

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CNBC reported that the broader “Meta One” subscription suite could range from $7.99 to $19.99 per month, depending on the level of service, with higher-tier plans offering additional AI and business-focused tools. Early testing of these premium services is expected to begin in markets including Singapore, Guatemala and Bolivia next month.

Meta has already experimented with subscription models in Europe, where it introduced paid ad-free versions of Facebook and Instagram in 2023 to comply with regional privacy regulations. That system allowed users to choose between a free, ad-supported experience and a paid alternative without advertisements.

The latest move signals a wider strategic shift as Meta attempts to balance advertising income with recurring subscription revenue. With growing investment in artificial intelligence and increasing infrastructure demands, the company is now positioning paid services as a central part of its long-term business model.

Industry observers say the expansion into subscriptions reflects a broader trend among major tech firms seeking more stable revenue sources amid rising operational costs and evolving regulatory pressures.

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