Bessent Economic Pain Justified for Security
US Treasury Secretary Scott Bessent said economic damage from the Iran conflict is acceptable for long-term security. He made the remarks during an interview with the BBC.
Bessent stressed that the conflict aims to remove nuclear threats from Iran. He said leaders must focus on long-term risks instead of short-term economic forecasts.
He warned that ignoring such threats could lead to far greater consequences. His comments come as global concerns over economic stability continue to rise.
IMF Warns Bessent Economic Pain Could Trigger Slowdown
The International Monetary Fund (IMF) warned that the conflict could slow global growth sharply. It said global growth may fall below 2% in 2026 under severe conditions.
The IMF linked this risk to rising energy and food prices. It said prolonged conflict could push the world close to recession.
However, the IMF added that a quick resolution could limit the damage. Growth could recover if energy supply stabilizes in the coming months.
Oil Prices Rise as Conflict Disrupts Supply
Oil prices increased after tensions disrupted the Strait of Hormuz. This route is critical for global energy supply.
Prices briefly touched $120 per barrel before falling to around $95. The IMF warned that prices could rise again if disruption continues.
Higher oil prices could increase inflation worldwide. This may force central banks to raise interest rates.
Global Impact Remains Uneven
The IMF expects uneven economic effects across regions. The UK may face one of the hardest impacts among advanced economies.
Middle Eastern countries could see slower growth or contraction. Iran’s economy may shrink significantly this year.
At the same time, some countries may recover if the conflict ends soon. Energy exporters with stable routes could limit losses.
Outlook Depends on Conflict Duration
The global outlook depends on how long the conflict continues. A short conflict would reduce economic damage.
However, a prolonged war could increase inflation and unemployment. Food insecurity may also rise in vulnerable regions.
Despite these risks, Bessent maintained his position. He said long-term security matters more than short-term economic pain.
