I’m deeply concerned about the curtailment of navigational rights & freedoms in the area of the Strait of Hormuz disrupting energy, transport, manufacturing & food markets & strangling the global economy.
All of humanity is paying the price.
Consider these three scenarios:
1: Restrictions are lifted today
Supply chains will take months to recover, prolonging lower economic output and higher prices
Global economic growth will drop from 3.4%to 3.1%.
Global inflation – which had been declining – will climb from 3.8% to 4.4%.
2: Disruption drags on through midyear
Growth falls to 2.5%.
Inflation hits 5.4%.
32 million people are pushed into poverty.
Fertilizers run low, and crops yields fall short.
45 million more people will face extreme hunger.
3: Severe disruptions persist through the end of the year
Inflation skyrockets past 6%.
Growth plummets to 2%.
Immense suffering takes hold, especially among the world’s most vulnerable populations.
We confront the spectre of a global recession – with dramatic impacts on people, on the economy, and on political and social stability.