Global inflation is expected to accelerate as a result of the war involving Iran, while growth prospects remain largely unchanged at this stage, according to an international survey of economists conducted by Bloomberg News.
Half of respondents anticipate slightly faster price increases in the euro area, while a similar proportion expect comparable developments in the United States. In China, nearly 40 per cent of participants forecast an acceleration in inflation, defined as a rise in consumer price growth of between 0.3 and 0.9 percentage points compared with previous projections.
The most significant inflationary threat stemming from the conflict relates to higher oil and natural gas prices, as roughly one fifth of global seaborne supply normally passes through the Strait of Hormuz, which has effectively been paralysed. Secondary effects are also expected, including higher airfares, increased distribution costs and broader risks to supply chains in the event of a prolonged conflict.
The majority of economists estimate that the war’s impact on gross domestic product in the United States, the euro area and China will be limited. However, many stress that the duration of the conflict will be the determining factor.
If oil prices remain persistently elevated, major importers such as China, Europe and India are likely to be more heavily affected. Energy exporters including Russia, Canada and Norway could benefit, according to an analysis by Ziad Daoud and Dina Esfandiary of Bloomberg Economics.
In the United States, consumers are expected to face higher fuel costs, reducing disposable income. Nevertheless, the overall economic impact is considered more moderate, as increased shale oil production has turned the country into a net energy exporter.
Source: NEWMONEY.gr