Higher energy prices due to the Middle East war would slow economic growth globally, particularly in emerging markets

This year's Middle East war has driven up energy prices, disrupting economic activity around the world. If these effects persist for a year, they will slow global growth, hurting emerging economies more than advanced economies, according to our new PIIE Working Paper, Global economic implications of the 2026 Middle East war. In this case, 2026 GDP would be lower than otherwise and inflation higher in most economies, but the effects would be spread unevenly: Countries more dependent on Middle Eastern oil, natural gas, and fertilizers would experience the largest hits to GDP. In emerging…

This year's Middle East war has driven up energy prices, disrupting economic activity around the world. If these effects persist for a year, they will slow global growth, hurting emerging economies more than advanced economies, according to our new PIIE Working Paper, Global economic implications of the 2026 Middle East war. In this case, 2026…

This year's Middle East war has driven up energy prices, disrupting economic activity around the world. If these effects persist for a year, they will slow global growth, hurting emerging economies more than advanced economies, according to our new PIIE Working Paper, Global economic implications of the 2026 Middle East war. In this case, 2026 GDP would be lower than otherwise and inflation higher in most economies, but the effects would be spread unevenly: Countries more dependent on Middle Eastern oil, natural gas, and fertilizers…