The war in the Middle East has undermined the eurozone economic recovery. GDP growth has slowed down and inflation has accelerated. ECB head Christine Lagarde suggested that the term "stagflation" should be a thing of the past. But analysts believe that the situation is too serious to ignore and are waiting for the tightening of the MPC.

Due to the war in the Middle East, Europe is again threatened with stagflation. What should we expect from the ECB in this case?  

Samsung Electronics Co., Ltd.

SK hynix Inc.

South Korean economist Shin Hyun Song has spent decades advising central bank governors on reducing financial risks, controlling inflation and ensuring economic stability. After the 2008 crisis, he developed macroprudential policy principles that have been adopted by central banks around the world. Now Shin will have to put his knowledge into practice in his home country - on April 21, he became the head of the Central Bank of South Korea. He will face a whole set of challenges, including a possible stock market crash after phenomenal growth.

South Korea's Central Bank is headed by international economist Shin Hyun-seong. What will he have to deal with? 

The military conflict in the Middle East will leave scars on the global economy that will not heal for a long time. The IMF warns that its economic forecast is "drifting" towards a more unfavorable scenario. Investors are forced to revise their strategies once again.

The outlook for the global economy is deteriorating. Opinions of investors and analysts

CONTEMPORARY AMPEREX TECHNOLOGY

BYD Company Limited

The shock caused by the cessation of oil and gas supplies from the Persian Gulf countries can lead to radical changes in the global energy market. This is exactly what has happened after previous crises. Electrification and green transition will accelerate, and investors can capitalize on the companies associated with these trends.

New momentum: How the energy crisis is accelerating the transition to green energy

Drive and fly less, go to work without a tie, and better yet, work from home. This is the advice given by authorities in various countries, which have to reduce demand for energy resources due to the largest disruption in the history of their supply. In different countries of the world again recommend to switch to remote work, which reminds of emergency measures in the times of pandemic Covid-19. But now it's a response to the energy shock from the war in Iran.

How different countries around the world are trying to save energy resources 

Exchange prices for oil, which have been above $100 per barrel since the war in the Middle East began, do not reflect the real state of oil supply. Buyers are sometimes paying one and a half times as much for shipments that are bought and shipped now. Saudi Arabia is considering scenarios in which the price could rise to $180, and the White House is considering scenarios in which the price could rise to $200 a barrel.

There is a "catastrophic" shortage of oil on the market. And even the price above $100 does not reflect it

Three weeks of war in the Middle East have brought a fifth of the world's oil and liquefied natural gas supplies to a halt and reshaped energy exports. The impact of this conflict on the LNG market has been described by market participants as an "apocalypse today", a nightmare and a terrible dream. They may be felt for years to come.

The war in Iran and the strike on the LNG complex in Qatar will lead to a shortage of gas on the world market. Who will suffer?   

The war in the Middle East, which has deprived the world of about 20% of the global supply of oil and liquefied natural gas, is changing expectations about global inflation, economic growth and the outlook for monetary policy. An average oil price of $150 or even $200 a barrel no longer seems impossible to analysts, and such a rise could reignite inflation.

'An incredible shift': where two weeks of war in Iran has taken the world economy

The war in the Middle East triggered a reversal in several strategies that were particularly popular with international investors. After the war began, Asian equity funds experienced the largest outflow of funds in four years, while the stagnant U.S. stock market attracted increased interest. The game against the dollar also unfolded: the U.S. currency regained its safe haven status. How long will this reversal last?

Michael Overchenko

Writes about:

Articles: 48

A term from the past: due to war in the Middle East, Europe faces stagflation again

South Korea's central bank is headed by a star economist. His challenges are the war in Iran and market records

The global economic outlook is deteriorating: what investors and analysts are saying

New momentum: How the energy crisis is accelerating the transition to green energy

Without ties, elevators and cars: How the world is coping with the energy crisis

There is a "catastrophic" shortage of oil on the market. And even the price above $100 does not reflect it

Waiting for the 'real carnage': How the Iran war has reshaped the global gas market

'An incredible shift': where two weeks of war in Iran has taken the world economy

Strategy Breakdown: How the war in the Middle East has changed the flow of capital