War-driven Shocks Revive Global Stagflation Fears

Global economic risks are rising as the effects of ongoing conflict in the Middle East begin to appear in economic data.

Economists warn that the combination of slowing growth and rising prices could signal stagflation.

The cumulative impact of seven weeks of war is expected to show in upcoming business surveys across major economies, Bloomberg News reported.

Purchasing manager indices (PMIs) will be closely watched for signs of weakening growth and persistent inflation. Early forecasts suggest deterioration in parts of Europe, while US indicators may remain stable.

Economists warn that the combination of slowing growth and rising prices could signal stagflation, echoing conditions last seen in the 1970s.

The International Monetary Fund has also cautioned about a range of possible outcomes, including a near-global recession.