Central banks meeting this week will assess how the Iran war could affect
inflation, while analysts at Goldman Sachs say the shock is far narrower than
the post-Covid surge because it is largely concentrated in energy. They estimate
higher oil prices could reduce global GDP by about 0.3% and raise headlines
inflation by roughly 0.5 percentage points over the next year. Disruptions
around the Strait of Hormuz may also impact chemicals and metals, but current
prices indicate only a 0.1 percentage-point increase in global inflation.
Goldman notes the Middle East accounts for just 1% of global non-energy exports,
far below the more than 20% of global trade disrupted by pandemic shutdowns in
Asia.
