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Foreign Policy Live

How Much Will the Iran Conflict Hurt the Global Economy?

Foreign Policy Live

Foreign Policy

News Commentary, News, Politics

4.1622 Ratings

🗓️ 29 April 2026

⏱️ 31 minutes

🧾️ Download transcript

Summary

The closure of the Strait of Hormuz is like a ticking time bomb for the global economy, disrupting the flow of energy and rippling through industries from agriculture to semiconductors. How bad could it get? The International Monetary Fund has cut its forecast for global growth this year from 3.4 percent to 3.1 percent in the best-case scenario and 2 percent in the worst case. What countries will be the most affected, and what can they do to protect themselves? Gita Gopinath, an economics professor at Harvard University who was formerly the first deputy managing director of the IMF, joins FP Live to discuss. IMF’s World Economic Outlook: Global Economy in the Shadow of War Ravi Agrawal: The World Is Paying the Price for America’s War Keith Johnson: Why Iran Isn’t Blinking Yet Jason Bordoff and Spencer Dale: Making the U.S. More Resilient to Oil Price Shocks Esfandyar Batmanghelidj: The Iran War Is Jeopardizing the Entire Global Economy Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0

The world is on the bring.

0:03.0

Wars, contentious elections, disinformation, spreading a warp speed, and Donald Trump at the center of all of it.

0:08.0

But what does it mean for the rest of us?

0:10.0

Every week on POTS of the World, Tommy Vitor and I cut through the noise to explain how global power is shifting.

0:15.0

No jargon, no homework, just clear honest conversations about what's happening and why it matters.

0:20.0

From breaking news to long-simmering international conflicts,

0:22.7

we dissect it all with critical analysis and some jokes that will surely embarrass our children one day.

0:27.9

Tune in to POTSate the World every Wednesday, wherever you get your podcast or catch it on YouTube.

0:33.6

Hi, I'm Ravi Agrawal, Foreign Policy's Editor-in-Chief. This is FP Live.

0:42.7

So the closure of the Strait of Hormuz is like a ticking time bomb for the global economy.

0:49.4

Regular FP listeners know why. It is a serious disruption to the flow of a fifth of the world's oil and

0:55.8

natural gas. It is hitting key inputs for low-tech goods like fertilizer and clothing, but also

1:02.4

very high-tech ones, like semiconductors. We know intuitively that the longer the standoff with Iran

1:09.6

continues, the worse it gets for the global

1:12.2

economy. Well, now there's some data to prove the point. The International Monetary Fund

1:17.5

has cut its forecast for global growth this year from 3.4% to 3.1%. But those projections came

1:25.7

out two weeks ago and were based on the conflict resolving quickly,

1:29.9

a very optimistic scenario that has, of course, not yet come to pass.

1:34.8

So here's the pessimistic scenario.

1:37.9

If the flow of crude oil and natural gas is not restored until next year, the IMF expects growth to fall to 2%, a rare

1:47.8

occurrence in recent decades.

1:50.1

Inflation would rise to 6%.

...

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