- Middle East uncertainty and renewed US-Iran tensions are affecting Brent crude prices and dampening investor sentiment across various markets.
- Geopolitical tensions escalated in the Middle East, threatening energy flows through the Strait of Hormuz.
EBRD Forecasts Regional Slowdown Amid Hormuz Disruptions and Tensions
What happened
The European Bank for Reconstruction and Development released its Regional Economic Prospects report on September 24, 2026. The report forecasts growth in the southern and eastern Mediterranean (SEMED) region at -0.7 per cent in 2026, before rebounding to 7.1 per cent in 2027. This outlook is influenced by geopolitical tensions, higher energy costs, and disrupted trade routes. Specifically, Iraq faces a sharp downturn due to oil export disruptions through the Strait of Hormuz, while Lebanon is expected to enter a recession amid renewed hostilities. Egypt's economy is forecast to grow by 4.6 per cent in 2026.
From ebrd.com
Why it matters
Regional tensions continue to affect SEMED economies through higher energy costs, increased uncertainty, and disrupted trade routes. The forecast reflects the impact of geopolitical risks on regional stability and trade flows. The outlook highlights the vulnerability of economies reliant on stable energy flows and regional security.
From ebrd.com
Who's involved
- Middle EastGeopolitical region whose economic prospects are tied to regional stability and energy flows.
- IraqCountry facing a sharp downturn due to disruptions to oil exports through the Strait of Hormuz.
- LebanonCountry facing an expected recession due to renewed hostilities.
Who could feel it
Possible knock-on effectsThese are possibilities Brind reasoned out, not predictions, and not advice. Most are not stated in any report.
- IraqSpeculative
Iraq might face severe economic contraction due to disruptions to oil exports through the Strait of Hormuz.
- Middle EastSpeculative
The entire Middle East region might face continued headwinds from geopolitical instability and energy cost volatility.
Keep exploring
The entities involved
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Middle East
geopolitical region encompassing Egypt and most of Western Asia, including Iran
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International Monetary Fund
international financial institution
Related events
- Due to the ongoing Middle East conflict, Egypt and the Philippines are facing major economic shocks caused by disruptions to global oil imports.
- The new event combines the geopolitical crisis of the Iran conflict and Hormuz Strait disruptions with a specific local issue regarding the Cumberland Council and cost-of-living impacts.
- Global supply issues, driven by the Middle East conflict and Hormuz Strait blockade, are pressuring UK energy prices and affecting national inflation warnings.
- Geopolitical tensions, including US strikes on Iran, are causing regional instability and impacting global petrochemical supply chains via the Strait of Hormuz.
- Disruption in the Middle East and other regions is impacting the global economic outlook, according to the World Economic Forum.