Stagflation Risks Rise as Iran War Drags On

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On April 30, 2026, stagflation risks are deepening as the Iran war enters its third month, with energy disruptions amplifying inflation and slowing global growth.

A Costly Conflict Reshapes the Economic Outlook

Stagflation concerns are intensifying as the Strait of Hormuz remains disrupted, prolonging a historic shock to global energy supplies. Brent crude trades near $112 per barrel, more than 50% above pre-war levels, reinforcing inflationary pressure.

Rising energy costs are straining households and businesses, while projections suggest oil could reach $120, dragging global growth toward 1.5% and lifting inflation close to 5%.

Uneven Impact Across Major Economies

Europe faces heightened recession risks due to heavy reliance on imported energy. In contrast, the U.S. shows relative resilience, though inflation expectations have climbed to 4.7%.

Asia is under pressure from energy shortages and capital outflows, while China remains a relative outlier with 5% growth, supported by diversified energy sources.