“We’ll see how Tehran responds, but the attack likely puts the conflict on a escalatory path,” Bloomberg Economics analysts including Ziad Daoud wrote in a report. “For the global economy, an expanding conflict adds to the risk of higher oil prices and an upward impulse to inflation.”
US strikes on Iran’s three main nuclear facilities come at a fragile moment for the global economy, and the outlook now hinges on how forcefully the Islamic Republic retaliates.
The World Bank, the Organization for Economic Cooperation and Development and the International Monetary Fund have all downgraded their global growth forecasts in recent months. Any significant increases in oil or natural gas prices, or disturbances in trade caused by a further escalation of the conflict, would act as yet another brake on the world economy.
