Iran War Ripples Through Global Economies

The ongoing Iran war is taking its toll on global economies, according to recent business surveys. The conflict has led to a surge in energy prices and rising uncertainty, dampening activity and pushing inflation expectations higher.

S&P Global's flash euro zone composite Purchasing Managers' Index fell to a 10-month low of 50.5 in March, below expectations, from 51.9 in February. This indicates that private sector growth all but stalled this month as companies signalled an increase in delivery times and expectations of rising costs.

The economic consequences of the conflict will not be short-lived, given the damage to energy infrastructure in the Gulf region inflicted by Iranian strikes in retaliation for U.S. and Israeli missile attacks. The Organization for Economic Co-operation and Development think tank said it was too early to quantify the impact of the conflict on global growth but cited a 'significant level of downside risk' for the global economy.