The Global Economy: The Countdown to Stagflation Has Begun

For the impoverished, the price elasticity of food expenditure is virtually zero; rising grain prices will force them to eat less, triggering malnutrition in children and deteriorating health among the elderly—potentially sparking broader social unrest, even regime collapse in smaller countries. Western media obsess over "U.S. inflation" and "the timing of a ceasefire," rarely addressing the underlying monopoly over discourse—but data does not lie: global grain prices will remain stubbornly high over the next four to five years. 3: Supply chain disruptions—price hikes across everything from chemicals to airline tickets. The impact of the U.S.-Israel-Iran conflict on global industrial chains runs far deeper and wider than imagined. So far, 21 companies have voluntarily withdrawn or downgraded their annual financial guidance; 32 have signaled upcoming price increases; and 31 have explicitly warned that "geopolitical conflict will cause tangible financial losses." AkzoNobel’s (parent company of Dulux) CEO stated that geopolitical conflict has directly driven up overall supply chain costs, with raw material costs set to rise by "several percentage points." Danone: Cross-border transportation of infant formula has been disrupted due to the Middle East conflict, significantly slowing sales growth. German tourism group: Voluntarily lowered its full-year core profit outlook and suspended revenue target guidance. United Airlines: Forecast sustained pressure on industry demand, with second-half and full-year earnings falling short of expectations. Key judgment: This is not an issue affecting "individual companies," but a systemic shock across the entire industrial chain. 4: Soaring global stagflation risks; IMF downgrades growth forecasts. Stagflation—simultaneous economic stagnation and inflation—is every central bank’s nightmare. The Asian Development Bank conducted two scenario analyses: Scenario One (early stabilization): Growth in developing Asia-Pacific economies slows from 5.4% in 2025 to 5.1%, while inflation rises from 3.0% to 3.6%. Scenario Two (conflict persists into Q3): Growth further decelerates to 4.7%, and inflation surges to 5.6%. The International Monetary Fund (IMF) slashed its growth forecast for the Middle East and Central Asia region by a full 2 percentage points—to just 1.9%. If the war does not end soon, "stagflation" will become the defining theme of the global economy in 2026–2027. 5: Financial markets have entered "risk-aversion mode": massive capital reallocation. All uncertainty = investors rushing en masse toward "safe assets." Following the outbreak of conflict, gold prices surged, U.S. Treasury yields fell, cryptocurrencies swung wildly, and stock markets experienced sharp volatility. Investors simply don’t know what tomorrow will bring—ceasefire or escalation?

The War’s Damage to the Global Economy Is Only ‘the Tip of the Iceberg’! Top Global Financial Officials Warn Markets Are ‘Indifferently Unconcerned’

Top global policymakers and financial officials are issuing a unified warning: markets have severely underestimated the damage Iran’s war is inflicting on the global economy—and the true shockwaves may only just be beginning. At this week’s International Monetary Fund (IMF) and World Bank Spring Meetings in Washington, a consensus contrary to market optimism is crystallizing—even if the war ends swiftly, its impact on the global economy will be far deeper and more enduring than anticipated. IMF Chief Economist Pierre-Olivier Gourinchas warned that, as energy disruptions persist, the Fund’s previously defined “adverse scenario”—global growth dropping to 2.5%—is becoming “increasingly likely.” Meanwhile, on the very same day the IMF downgraded its global growth forecast, U.S. equities hit a record high for the S&P 500 index—a stark contrast that left attendees deeply puzzled. When IMF Managing Director Kristalina Georgieva was directly asked whether markets should exercise greater caution, she responded unequivocally: “Yes, I think so.” The tip of the iceberg: The full scale of the energy shock remains unseen. Qatar’s Finance Minister Ali bin Ahmed Al Kuwari delivered one of the most candid warnings yet at the IMF meeting. He declared, “What we see now is merely the tip of the iceberg,” and painted a scenario in which energy price shocks escalate into actual shortages within one to two months—leaving some governments “without enough energy to light their own countries.” Al Kuwari also warned that fertilizer shortages would trigger a food crisis. He reminded participants that Qatar supplies nearly one-third of the world’s helium—a critical input for semiconductor manufacturing. “The enormous economic shock from this war will not be distant,” he said. Fatih Birol, Executive Director of the International Energy Agency (IEA), characterized this event as the largest energy crisis in human history. He noted that although the Strait of Hormuz has effectively been closed for six weeks, the last pre-war shipments leaving the Persian Gulf are only now arriving at their destinations. “March has already been an extremely difficult month globally; April is likely to be worse than March,” he told reporters on the sidelines of the Spring Meetings. Structural damage: Not just a temporary shock. Policymakers and economists attending the meetings widely emphasized that this war is causing not merely cyclical disruption—but deep, structural changes: higher costs, longer trade routes, and heightened geopolitical uncertainty—ultimately lowering the world’s potential growth rate. World Bank President Ajay Banga cautioned against viewing the current situation as “just one more month of pain.” “Even if fighting stops and energy infrastructure ceases to be damaged, restoring supply systems will take time,” he said. European Central Bank President Christine Lagarde issued a similar warning regarding Europe’s growth outlook.

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