Middle East War and the Return of Global Economic Risk

An open confrontation between Israel, backed by the United States, and Iran has reintroduced geopolitical risk as a central factor in the global economic outlook. The conflict affects three key channels: energy markets, financial flows, and trade logistics, particularly through vulnerabilities around the Strait of Hormuz. For Asia and Association of Southeast Asian Nations, exposure includes higher energy costs, capital flow volatility, and trade disruptions. The overall macroeconomic impact will depend on the conflict’s duration, escalation, and implications for inflation and monetary policy.

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