UN secretary-general Antonio Guterres on Thursday warned of the devastating consequences of prolonged disruptions in the Strait of Hormuz.
In a press conference, Guterres offered three scenarios. In the worst-case scenario, where the strait remains closed until the end of the year, global inflation would skyrocket past 6%, and growth would plummet to 2%.
Spectre of a global recession
“Immense suffering takes hold, especially among the world’s most vulnerable populations. And we confront the spectre of a global recession, with dramatic impacts on people, on the economy, and on political and social stability,” he warned.
Guterres said these consequences are not cumulative but exponential. The longer this vital artery is choked off, the harder it will be to reverse the damage and the higher the cost to humanity.
Supply chains to take months to recover
Even in the best-case scenario, “where restrictions are lifted today”, supply chains will take months to recover, prolonging lower economic output and higher prices, he warned.
According to the UN chief, in that scenario, this year’s global economic growth would still drop from 3.4% to 3.1%. Global inflation, which had been declining, would climb from 3.8% to 4.4%. Global merchandise trade growth would shrink from 4.7% last year to roughly 2%, with some meaningful supply chain interruptions.
In a second scenario, where disruption drags on through midyear, global economic growth would fall to 2.5%. Inflation would rise to 5.4%. Some 32 million more people would be pushed into poverty and 45 million more people would face extreme hunger, he said.
As the Middle East crisis lumbers into its third month, the consequences grow dramatically worse with each passing hour despite a fragile ceasefire between the US and Iran, he said.
Call for reopening of Strait of Hormuz
Guterres called for the reopening of the Strait of Hormuz.
“My message to all parties is clear: Navigational rights and freedoms must be restored immediately, in line with the Security Council Resolution 2817. Open the Strait. Let all ships pass. Let the global economy breathe again,” he said.
“That requires more than physical reopening,” Guterres said. “It requires shipping to be safe, predictable and insurable.”
At the same time, the UN chief urged all parties to refrain from actions that could undermine the current ceasefire.
“Now is the time for dialogue, for solutions that pull us back from the brink, and for measures that can open a pathway to peace,” Guterres said. “The world is waiting.”
- UN Secretary-General Antonio Guterres warned that prolonged disruptions in the Strait of Hormuz could cause severe global economic consequences, including inflation surpassing 6% and growth dropping to 2% in a worst-case scenario.
- Guterres outlined three scenarios: immediate reopening would still cause months-long supply chain recovery and economic slowdown; midyear disruption would worsen inflation to 5.4%, reduce growth to 2.5%, and increase poverty and hunger significantly.
- He emphasized that the negative impacts of the closure are exponential, worsening over time, and could lead to global recession, heightened suffering, and instability.
- Guterres called for the immediate reopening of the Strait of Hormuz, urging the restoration of navigational rights and safe, insurable shipping to support global trade and economic stability.
- He stressed the importance of maintaining the current ceasefire and encouraged dialogue and peaceful solutions to prevent further escalation and promote long-term peace.
