Under the prolonged war scenario, global inflation could rise to 7.7%, close to the 2022 peak
A prolonged conflict in the Middle East, centred on Iran, could tip the global economy into a rare and synchronised recession, while already triggering fuel supply concerns in South Africa.
According to new modelling by Oxford Economics released on Friday, the world economy faces a sharp slowdown if disruptions to energy flows persist, particularly through the Strait of Hormuz, a critical artery for global oil trade.
“Under our prolonged war scenario, global inflation would rise to 7.7%, close to the 2022 peak,” said Ben May, director of global macro research at Oxford Economics.
“The magnitude of this price spike triggers large non-linearities that magnify the economic impact, resulting in a rare contraction in global…