This narrow Strait of Hormuz is creating rising recessionary risks for Singapore
The ongoing Iran war has disrupted global oil and gas supplies, driving energy prices higher and injecting volatility into equities, which may lead to recessionary risks for Singapore. The country's households can expect to pay higher electricity and gas tariffs, with potentially sharper increases if the war persists.
The Strait of Hormuz is a critical choke point for global oil and gas supplies. Roughly a fifth of global oil and gas transits this narrow passage. The ongoing Iran war has disrupted supplies, driving energy prices sharply higher. This has injected volatility into equities and revived fears of stagflation. Singapore's households will feel the pinch with higher electricity and gas tariffs. The country's growth may be hit due to energy supply shocks. Central banks are in a bind, with easing monetary policy potentially entrenching inflation and policy tightening worsening the slowdown.
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