The Inflation Trap: How War Shocks Force EM Central Banks Into Divergence

Emerging-market central banks are abandoning growth support to combat inflation spirals triggered by Middle East disruptions and dollar volatility. The IMF's April downgrade—EM growth to 3.9% from 4.2%, inflation to 5.5% from 4.8%—reveals a bifurcated global economy where commodity importers tighten aggressively while advanced economies hold steady, risking synchronized stagflation.