Iran war inflation shock seen below 2022 levels – FT
The inflationary impact of the Iran war is expected to fall well short of the shock that followed Russia’s invasion of Ukraine in 2022, according to a Financial Times analysis of economists’ forecasts.
The report said global inflation expectations have risen since the conflict began, but by considerably less than during the energy crisis that followed the start of the Ukraine war.
While oil prices have climbed sharply amid concerns over Middle East supplies and shipping routes, economists told the FT that the world economy is less vulnerable to a sustained inflation spiral than it was several years ago.
The report noted that natural gas prices remain far below the peaks reached in 2022 and that central banks are starting from a much tighter policy stance, helping to contain broader price pressures.
The FT added that hopes for a US-Iran agreement and the reopening of the Strait of Hormuz have helped ease some of the worst fears about disruptions to global energy markets.
