🌍 World Economy Update – Impact of Ongoing Wars (June 18, 2025)
📉 Growth Forecasts Slashed
#worldbank lowered global GDP forecast to 2.3% for 2025 — slowest growth in decades.
Investor sentiment is fragile, with capital flowing into safe-haven assets like gold and U.S. bonds.
🛢 Energy Shock ::
Oil prices surged 10% over the past week. Brent crude hit $74/barrel, largely due to risks at the Strait of Hormuz, which moves ~20% of global oil.
High energy prices are reigniting inflation fears globally.
💱 Central Bank Dilemma
Central banks (U.S. Fed, ECB, BoE) are stuck between:
Tightening policies to fight inflation.
Avoiding recession amid global slowdowns and market shocks.
📌The Fed has paused rate cuts and signaled caution going forward.
🚢 Trade & Supply Chain Risk
Conflict has disrupted:
Shipping in the Persian Gulf.
Air traffic routes across the Middle East.
Investor confidence in emerging markets in Asia and Africa.
📌 Summary
📍Area Current Effect
Oil & Energy Rising prices, supply bottlenecks
Inflation Renewed pressure worldwide
Growth Slowing sharply
Trade & Logistics Strained due to conflict zones
Policy Response Limited flexibility for rate moves