War against time in Iran: Time is running out to save the economy from crisis |Economy |COUNTRY

The conflict has caused a new "shock" to the global economy, with unpredictable consequences.Weeks of war will have little impact, but companies and central banks are in suspense

Race against time in Iran: Time is running out to save the economy from crisis

The conflict presents a new "shock" to the global economy with unexpected consequences.The weeks-long battle will have little impact, but companies and central banks are nervous.

Everyone has a plan until they get punched in the face, said a famous boxer Mike Tyson.The world of business seems to have created the art of protection in many ways and without much idea where the next place will land, repeating all its flight plans and not falling into the frame.Since the pandemic of 2020 and the forgetfulness it means, the world has recorded one shock after another without falling into the general economy.Post-Covid, the Russian invasion of Ukraine caused a shock wave of energy that, along with the disruption of the supply chain, led to the biggest crisis in four years.

Central banks responded with a dramatic increase in interest rates, which usually leads to serious crises, but they achieved something so difficult that it was almost considered a Marian apparition, "a disinflationary impurity", in the parlance of Anglo-Saxon economists.That soft landing.And then Donald Trump returned to the White House, declared a trade war on the left and the right with global impact, and governments, the guardians of their monetary policy and companies around the world are again throwing away the roadmaps and thinking about plans b, c, d... Last week, while negotiations between the parties were theoretically taking place, the United States and Israel attacked Iran and ordered the military Alimen Khalid Khalid.

Gasoline prices in Spain have seen their biggest increase in eight months and many citizens are filling up their tanks and extra cans, fearing a new price hike.$100 a barrel of oil, or 100 euros per megawatt hour (MWh), is more than a psychological barrier. But it's a level not seen since Russia invaded Ukraine in 2022, and will return if the weeks leading up to this one repeat.The spike in inflation has made the Euribor, the leading measure of mortgage rates, even hotter. While it wasn't a sharp rise, it sent an important warning that the war could spill over into mortgages sooner rather than later. Spain's stock market suffered its worst week since the Ukraine war (again), falling 7%, pressured by fears over energy prices and economic weakness. It's a very bad combination.

"We see everything with a lot of uncertainty, we are working to calculate the impact of everything, we have to present a new economic forecast soon, and we are working with all the domestic issues and to see how it can affect the global economy, the United States, Europe and Spain. Everything is very preliminary," said Rafael Doménech, head of economic analysis at BBVA Research.

If this happens in just a week, what will the economy face for months?In all risk sections of all companies, study centers, boards of oil companies or all kinds of companies, the question exploded, maybe there was a plan, the seventeenth plan, until a new blow fell in their face.In the Spanish case, and: Trump's direct threats to Spain, which require the approval of the authorities to end the purchase of Webster Bank, warn various companies with customers from any other wine or oil exporter Banco Santander in the Atlantic.

The United States of America draws the most energy and better resists turbulence, with the dollar as a safe haven currency that seemed to be forgotten, registering a growth of 2% against the euro.Hence everything to write.The new shock once again proves the resilience that major economies have shown in the face of polycrisis in the last five years.

Angel Talavera, chief economist for Europe in London at Oxford Economics, calls for calm and warns that the development of a barrel of oil is viewed in nominal terms without taking into account the development of inflation: "Let's remember that oil at 80 dollars is equal to oil at 60 dollars 10 years ago."Expect an impact though."Even with a relatively short conflict, it is difficult to know whether energy prices will quickly return to normal or remain higher than before," he explains.immediate impact on fuel and electricity prices, the longer the period of high energy prices lasts, the more likely they will start to be transmitted to the entire production chain, as we have already seen in 2022, and then the impact on performance can grow exponentially," he adds.

Washington is not fighting a long fight.With midterm elections scheduled for November, Trump can't afford to have too many coffins flying American flags at U.S. airports or punishing voters' pockets with skyrocketing energy prices.Although the administration's pursuit of energy dominance in both oil and natural gas probably gives him some leeway for several months.Make a maneuver.Not much: The conflict has closed the Strait of Hormuz, a key shipping route, and led to the sharpest increase in U.S. crude oil imports in 43 years (36%, to $90 a barrel).Analysts are starting to see the psychological threshold creeping closer to $100, reviving fears of a recession.

We are not in 1973, the world is becoming more and more independent of black gold, but the oil crisis is still going on and is poisoning the entire economy.The price increase quickly spreads to the fuel, transportation and production costs of goods, which in turn become more expensive, in a vicious circle that punishes consumption and slows down activity, adding to the negative spiral.it was held in check by the fear of renewed inflation.

Analysts J.Safra Sarasin, a Swiss investment bank with a 180-year history, draws three possible scenarios.The center, which is given a 50 percent chance, predicts a war campaign of "several weeks" that weakens the Iranian regime without succeeding in toppling it.The Strait of Hormuz will reopen without structural damage and the United States and Iran will resume negotiations.In this case, oil will stabilize at around 75 dollars per barrel, and inflation will temporarily increase by half a point, without a major impact on economic growth.

There are two other, more remote scenarios (25% probability each): best and worst.In the first, US strikes destroyed Iran's military capabilities in just four weeks, Tehran conceded in its nuclear and ballistic race, and Trump declared absolute and swift victory.After that, crude oil quickly reaches 65 dollars, inflation suffers severely and there is no growth.

In the worst-case scenario, the Iranian military remains strong for weeks, attacks on neighboring countries continue, and the United States does not withdraw and is trapped in one of those endless conflicts that tend to become chronic.oil threatens.

If it goes on for long, it will look bad for them in Europe.Alicia García Herrero, chief Asia-Pacific economist at Natixis and principal researcher at Bruegel, believes that the war, however short (and expected to be a few weeks) will inevitably reduce "several tenths of GDP".In a long-term conflict, Germany's dependence on gas from Qatar, with which it has a long-term contract, would leave Spain less exposed, but not immune."I believe this is another energy crisis for Europe, short or long, and Europe has the most to lose because it doesn't have shale gas like America, it can't turn to Russia like China, and it doesn't have as many strategic reserves as China," she warns.She is also critical of European planning in this area: "I don't understand why we don't have more reserves when oil is below $60, what we do in Europe, that we are always in a weaker position than others."

In the scenario of an entrenched war, the economist warned, a US credit blockade that would stop activity in its tracks cannot be ruled out.Just as the world has learned to mitigate the impact of shocks like the Covid pandemic, there are ways to mitigate the impact of a debacle like the collapse of Lehman Brothers.Governments and central banks have greased the machinery, yet the financial margin, public spending and Western economies are already saddled with extremely high levels of debt, which is the international monetary system.The foundation's alarms have been created.

The Washington-based group estimates that global public debt will exceed the equivalent of 100% of GDP by 2029, the highest since the 1948 war, and calls on governments to rebuild the cushion for future needs.public, but we need to rely on it.And in many places that is not clear.Even if some countries need to spread aid equal to 10% or 15% of GDP, we do not know if the market will follow," said Pierre-Olivier Grinchat, the head of the fund, last January. The company's latest forecast calls for global growth of 3.3%in 2026 and 3.2% in 2027.

Investment stimulus related to artificial intelligence, combined with expansionary fiscal and monetary policies, would continue to balance trade tensions and uncertainty, according to most analysts.According to Doménech of BBVA Research, these positive forces will continue to work if the conflict does not last.His department considers a "short" conflict to be one that ends within four to five weeks, with crude oil prices around $90 a barrel and European gas also more expensive, although without specifying the figures.This effect is already slowing activity.for the quarter, in addition to increasing inflation and undermining confidence, but without the blood reaching the river.

"This would not structurally affect global growth and would have a very small impact. The last data we have seen, from late 2025 and early 2026, was good enough to revise up the forecasts of some economies, and this would compensate for this slowdown. The global economy could continue to advance at a pace of 3.1% of the barrel when those numbers disappear to 2% or 3 barrels. $110, with contagion tothe supply chain, investments and maritime transport "Here we are talking about something more than an energy shock."

The conflagration in the Middle East has put Spain on the map of Europe.Thanks to consumption, it is one of the fastest growing economies in the world and organizations agree that GDP will grow by 2.2 to 2.4 percent this year.Faced with a power shock, the government introduced what is often called the Iberia deregulation, which reduced the surcharge.According to the experts of Funcas, the bank's reserve base, inflation may increase in the summer and the duration of the three-month conflict - the base case they use - will exceed 3%, which will represent two tenths of growth in 2026. The question is whether the base case is no longer there.

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