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(Bloomberg) — The global economy still faces multiple risks even as the US and Iran agree to halt the war in the Middle East, the head of Irish bank AIB Group Plc warned.
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“I would not get overexcited at this stage about a sustained moderation in oil prices,” Colin Hunt told Bloomberg TV, adding it’s “hard to say based on what we have seen overnight and in the past number of days” whether Ireland would see improved growth off the back of the agreement.
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AIB expects domestic growth to slow this year as soaring costs driven by the Iran war dampen consumer demand. The effective three-month closure of the Strait of Hormuz has pushed up global energy prices, stoking inflation and the European Central Bank’s first interest-rate hike since 2023.
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US President Donald Trump is adamant the strait will reopen by Friday, allowing oil to flow again — though Iran has characterized the deal differently. Before the war, the waterway handled around a fifth of all oil supply in a global market of more than 100 million barrels a day.
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Brent crude was trading at around $81.50 a barrel on Tuesday, down about 2% on the day and compared to a peak of more than $126 in late April.
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Despite the conflict, Ireland’s economy is expected to grow faster than many of its European peers and remains near full employment. It’s largely thanks to the multinational companies with a major presence there, including Meta Platforms Inc. and Apple Inc., which have bestowed the small country with a rare budget surplus.
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Modified domestic demand, a metric that aims to strip out foreign multinational activity in Ireland, is forecast to slow from 4.9% in 2025 to 2.7% in 2026, according to AIB’s May economic outlook.
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“Every generation is condemned to deal with a black swan event, but we’ve had one every year,” Hunt said, referring to events like Brexit, the Ukraine war, and US tariffs. He also warned of a “loosening” in the tech sector, as AI efficiencies lead to job losses in the multinational tech hub.
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