The global economy has entered a deadlock due to the war in the Middle East, warns the International Monetary Fund. What seemed at the beginning of the year to be a stable and promising context has turned, in just a few months, into a complicated situation. Just as tensions over tariffs were beginning to ease, the bombings on Tehran have brought back uncertainty and the risk of a major energy crisis. Although the United States and Iran have recently reached a fragile truce, the dangers to the global economy remain high. Some of the damage has already been done, now it matters how severe the effects will be, writes El Pais.
The International Monetary Fund warns that, in the most pessimistic scenario, the global economy could enter into recession if the war continues after the summer, and the price of oil rises to 110 dollars per barrel. In such a situation, inflation could reach 6%, and the global economy would suffer a strong shock.
“The duration and magnitude of the conflict will decisively matter, as well as how quickly the energy sector recovers after the fighting ends”, explains Pierre-Oliver Gourinchas, the chief economist of the IMF.
The institution is convening these days in Washington, together with the World Bank, to analyze the global economic situation. Four Romanian ministers are also participating in the meeting. The conclusion is clear: everything depends on how the war evolves, and that is hard to predict.
From the IMF report, a slight dissatisfaction with the United States and Israel can also be felt.
Until the end of February, economists were optimistic and even preparing better estimates for this year. However, the attacks on Tehran completely changed the situation and brought serious risks to the global economy.
The situation worsened when Iran blocked the Strait of Hormuz, a key point through which approximately one fifth of the world’s oil passes. Attacks on energy infrastructure affect the delivery of oil, gas, and other essential products for the industry.
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