Government budget planners struggle to forecast fiscal policy impact on inflation amid geopolitical volatility

Finance ministers and central bank officials lack reliable tools to model how external shocks (like US-Iran conflicts affecting oil prices) will force them into periodic fiscal reliefs that destabilize inflation targets. Current forecasting models fail to account for the cascading effects of geopolitical events on commodity prices, government spending decisions, and monetary policy coordination, leaving policymakers reactive rather than proactive.