With conflict in the Middle East towards lower world GDP prospects 2026

The conflict in the Middle East is driving upward pressure on the price of crude oil, discounting Iran's role as an oil producer and the strategic importance of the Strait of Hormuz as a trade route. A general downward trend is foreshadowed in the outlook for the world economy in 2026. This is what Istat emphasises in its Note on the Italian economy.

The outlook for the world economy at the beginning of 2026 is characterised by high uncertainty, fuelled by geopolitical crises and structural changes in trade policies that have accentuated the fragmentation of international markets.

The escalation of the Middle East conflict, with the US and Israeli attack on Iran at the end of February, caused a shock on the supply side of energy products with potential systemic effects on economic growth, employment and inflation. Iran's importance as an oil producer and the strategic significance of the Strait of Hormuz immediately generated a rise in the prices of Brent crude and other major energy commodities.

The size of the economic impact of the current crisis, which is difficult to assess at the moment, will depend on its persistence and on whether mining infrastructure or supply routes are compromised. At the moment, the high volatility of the stock markets suggests that the market has not yet fully discounted the possibility of a long-lasting conflict.