All articles tagged with #global economy
IMF chief Kristalina Georgieva says the Iran war will permanently scar global growth, pulling down forecasts due to energy disruptions, damaged infrastructure, and lost confidence—even if a durable peace is reached—striking poorer and oil-importing nations hardest and urging targeted support and prudent fiscal/monetary policy.
Analysts warn the Bab el-Mandeb Strait—the Red Sea gateway—could become the world’s second major shipping chokepoint after Hormuz as the Houthis enter the conflict, risking disruption to about 14% of global maritime trade and roughly 4.2 million barrels of oil per day. While the strait cannot be fully closed, attacks or rising insurance costs could slow Red Sea transit via the Suez Canal, potentially hobbling supply chains and raising energy prices worldwide.
Surging oil prices tied to the Iran war threaten a broader global economic spillover as supply chokepoints and energy‑infrastructure damage drag on for months. Brent crude briefly hit near $119 a barrel and settled around $113, with analysts warning prices could climb further if the conflict persists, worsening costs for transport and manufacturers and pushing inflation higher. While the U.S. economy is relatively insulated by domestic production, a sustained disruption could erode global demand and shave households’ disposable income, potentially pushing inflation toward the Fed’s 3% target and triggering a broader growth scare.
An opinion piece argues the current energy crisis—driven by Strait of Hormuz disruptions and Gulf diversification—could trigger a global downturn potentially larger than the 1970s or COVID-19. It highlights rising oil and gas prices, regional cutbacks, and the risk of long-term supply losses from ongoing conflict. While renewables offer a path, the transition may be too slow to avert sustained economic pain, and geopolitical actions could intensify the crisis before it improves.
The Iran–Israel conflict is driving crude toward $100 a barrel, prompting the EBRD to warn that sustained high energy prices could shave global growth by up to 0.4 percentage points and lift inflation, while the OECD keeps 2026 growth at 2.9%. Reports of an Israeli strike killing IRGC navy commander Alireza Tangsiri circulate as Iran vows readiness and attacks and casualties continue in the region. Meanwhile, U.S. President Trump presses Tehran to capitulate or face harsher action and CENTCOM says Operation Epic Fury remains on track, all amid ongoing market volatility.
Rising fuel costs around the world are lifting living expenses and fueling economic concerns, impacting transportation and energy use while pressuring household budgets and prompting policy responses to stabilize markets.
Economist Henrietta Treyz (Veda Partners co-founder) warned that prices won’t fall anytime soon after Trump’s Iran war; even if the Strait of Hormuz reopens quickly, it could take about 200 days for prices to normalize, and higher crude costs are expected to ripple through the economy for years, lifting prices on gas, food, airline tickets, and semiconductors.
Iran warned it would target recreational and tourist sites worldwide while insisting it is still producing missiles, as U.S.-Israel strikes continue and Gulf energy sites come under attack, pushing up oil prices and threatening the global economy amid the ongoing war.
The WTO warns that a prolonged oil-price shock from the Middle East conflict could curb the AI boom since AI investment is energy-intensive, potentially shaving about 0.5 percentage points from global goods trade growth and risking food security if energy and fertiliser costs stay elevated; 2025 still saw 4.6% goods trade growth driven by Asia and North American AI investment, but the outlook calls for growth to slow to about 1.9% in the absence of shocks.
As the U.S.-led war in the Middle East drags on, economies around the world are bearing a heavier burden than Americans, enduring energy shocks, gasoline shortages, and currency devaluations driven by disruptions in the region.
Australia’s Reserve Bank raised rates by 25 basis points to 4.1%—the second hike in as many months—citing higher fuel costs tied to Middle East disruption and firmer inflation expectations; the move tightens policy ahead of a week when the BoE, Fed, ECB and BoJ are expected to hold rates, with domestic inflation around 3.8% in January and growth uncertainty.
The Iran conflict is disrupting traffic through the Strait of Hormuz, tightening energy supplies and lifting oil and gas prices, prompting countries to ration energy and curb demand with measures ranging from Bangladesh closing universities to South Korea capping gas prices, Thailand encouraging remote work, and the Philippines and Pakistan adopting shorter workweeks. Asia faces the sharpest impact, with Europe and Japan watching and weighing price controls, while China could gain long‑term from higher prices and a shift toward coal and renewables as the global economy absorbs this new shock in the 2020s.
Bank of America's global economist Antonio Gabriel warns that investors may be underestimating how a prolonged war with Iran could disrupt the global economy, noting that markets have treated it as a temporary shock even as inflation and oil-price dynamics influence Fed expectations and equity valuations.
With the Strait of Hormuz potentially shut and Iran signaling attacks on passing ships, oil and commodity supplies face disruption, sending prices higher and risking a stagflationary drag that could slow or derail growth in major economies—especially Europe and East Asia. Goldman Sachs models project higher U.S. inflation and weaker GDP if prices stay elevated, while extreme Oxford Economics scenarios imply contractions in the eurozone, UK, and Japan and a global GDP hit around 0.7% with inflation near 5%.
The International Energy Agency announced its largest-ever release of oil reserves—400 million barrels—to curb surging energy prices caused by the US-Israel war against Iran, as tensions in the Strait of Hormuz threaten oil shipments and ripple through the global economy.