Is this email difficult to read? View it in a web browser. ›
The Wall Street Journal Pro The Wall Street Journal Pro
Central Banking Pro Central Banking Pro
 
South Korea’s Economy Rebounds Amid Middle East War Risks

  • South Korea’s economy expanded 1.7% in the first quarter, exceeding expectations due to robust semiconductor exports.
  • The Bank of Korea expects weaker growth and higher inflation due to the Middle East conflict and its impact on oil prices.
  • The Seoul government prepared a $17 billion supplementary budget to cushion businesses against energy shocks.

 
Philippine Central Bank Raises Rates as Mideast War Fuels Inflation Risks

  • The Bangko Sentral ng Pilipinas raised its benchmark overnight reverse repurchase rate to 4.50% amid Middle East war inflation risks.
  • The central bank cited a deteriorating inflation outlook, with average headline inflation likely to breach the 4.0% ceiling in 2026 and 2027.
  • The Middle East conflict choked off supply routes, disrupting oil and gas flows to Asia and raising inflation concerns.
Fear of Shortages Boosts Global Factories, But Eurozone Activity Declines

  • Factories in parts of Asia and Europe reported increased activity as customers rushed orders to avoid price hikes and shortages from the Middle East conflict.
  • Japan’s manufacturers signaled the steepest rise in output for over 12 years in April, while French manufacturing output rose at the fastest pace in 50 months.
  • The eurozone’s composite Purchasing Managers Index fell to 48.6 from 50.7, reaching its lowest level in 17 months, indicating a decline in activity.
Turkey’s Central Bank Holds Rates as It Gauges Higher Energy Prices

  • Turkey’s central bank held its benchmark one-week repo rate at 37.0% for a second consecutive meeting.
  • The bank is closely monitoring high energy prices from the Middle East conflict and their impact on inflation.
  • Leading indicators suggest a slight increase in April’s underlying inflation trend, with the bank attentive to upside risks.
Eurozone Consumers Feel Pinch as Iran War Drives Costs Higher

  • Eurozone consumer sentiment fell to minus 20.6 in April, its lowest level since December 2022, amid soaring energy prices from the Iran war.
  • The European Central Bank cut its 2026 eurozone economic growth forecast to 0.9% from 1.2%, with a severe scenario potentially reaching 0.4%.
  • The European Commission proposed plans to mitigate the energy crisis, including shoring up grids and coordinating fuel storage.
U.K. Budget Deficit Was Smallest Since Pandemic

  • The U.K. budget deficit narrowed to 4.3% of GDP for the fiscal year ending April, but the Middle East conflict threatens future reductions.
  • Borrowing for the year totaled 132 billion pounds, down from 151.9 billion pounds, despite a rise in interest payments to 97.6 billion pounds.
  • U.K. government borrowing yields surged as the Middle East war continued, reflecting expectations of higher inflation and interest rates.
EU Floats Plan to Mitigate Energy Crisis

  • The European Union introduced AccelerateEU, a plan to mitigate volatile energy prices caused by the Middle East conflict.
  • The conflict, triggered by a U.S-Israeli attack on Iran, has raised Brent oil futures by 37% and European benchmark gas by 35.7%.
  • EU Commissioner Dan Jørgensen stated the bloc spent an extra 24 billion euros since the Iran war began.
Eurozone Governments’ Budget Deficit Fell in 2025, But Middle East Conflict to Drive Rebound

  • Eurozone governments cut their combined budget deficit to 2.9% of GDP in 2025 from 3% in 2024, according to the EU statistics agency.
  • The IMF warned that eurozone deficits would likely be higher if the Middle East conflict and energy supply disruption are prolonged.
  • The eurozone’s budget deficit is forecast to widen to 3.3% of GDP in 2026, driven by energy price jumps and military buildup.
U.S. Officials Try to Get a Grip on Risks Bubbling Inside Private Credit

  • The SEC, Treasury and bank regulators are ramping up inquiries into the $3 trillion private-credit industry amid investor angst.
  • Investors sought to pull over $20 billion from certain private-credit funds in the first quarter, but only $11 billion was redeemed.
  • The SEC opened enforcement investigations into private-credit managers, while industry executives play down systemic risk.
 

About Us

WSJ Pro Central Banking brings you news and analysis from a global team of reporters and editors at The Wall Street Journal and Dow Jones Newswires. Send your tips, suggestions and feedback to service@dowjones.com. An artificial-intelligence tool created these summaries, which are based on the text of the article and checked by an editor. Read more about how we use artificial intelligence in our journalism.
 
Desktop, tablet and mobile. Desktop, tablet and mobile. Access WSJ‌.com and our mobile apps. Subscribe