Nouriel Roubini: The global economy hangs in the balance as a result of the Middle East conflict
The global economy is at risk due to the US-Israeli war with Iran, with potential stagflationary pressure and impact on global equity markets. The economic damage would be most severe in Asia, with Europe and the US also facing negative consequences.
The US-Israeli war with Iran is affecting the global economy. Oil, gas, and other prices are elevated due to the conflict. The longer the war lasts, the longer prices will remain high. Asia is suffering from an energy-price and -quantity shock, while Europe faces negative terms-of-trade pressure and inflation risks. The US is a net energy exporter, but its inflation will be higher and growth lower. The war's outcome is uncertain, with potential escalation and regime collapse in Iran. This could lead to a more stable Middle East, but also risks further conflict and economic damage.
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