War in the Middle East Threatens Major Crisis in Global Economy

Continued hostilities in the Middle East threaten a major crisis that will affect several sectors of the global economy, the UN warns.

The conflict over Iran is estimated to amplify the impact of geopolitical risks far beyond energy markets. Rising transportation costs and insurance premiums are increasing pressure on the economy. Disruptions in trade and financial markets also increase the risk of a more widespread crisis with knock-on effects. The report suggests that global trade growth could slow from nearly 5% in 2025 to 1.5-2.5% this year. Global economic growth will also slow from nearly 3% in 2025 to just over 2.5%. This assumes the conflict does not escalate further.

Experts also note that escalating conflict exposes underlying vulnerabilities, including weak growth, rising inequality, and rising costs of living.