UN chief warns of 'global recession' as Middle East crisis enters third month

N Secretary-General Antonio Guterres warned on Thursday that the Middle East crisis is driving the global economy toward recession, outlining three dire scenarios as continued disruptions to the Strait of Hormuz enter its third month.

"The Middle East crisis is lumbering into its third month," Guterres told reporters at a news conference at UN headquarters in New York, warning that "despite a fragile ceasefire, the consequences grow dramatically worse with each passing hour."

Expressing deep concern over shipping disruptions, Guterres said he is "deeply concerned about the curtailment of navigational rights and freedoms in the area of the Strait of Hormuz," warning it is "impeding the delivery of oil, gas, fertilizer, and other critical commodities" and "strangling the global economy."

"As with every conflict, the whole of humanity is paying the price – even if a few are reaping huge profits," he said, adding that "the pain will be felt for a long time to come."

Outlining forecasts based on multiple sources, he warned that in the best-case scenario, where restrictions are lifted immediately, "supply chains will take months to recover, prolonging lower economic output and higher prices," further straining a world still recovering from the pandemic and the war in Ukraine.

He explained a second scenario, where disruption drags on through midyear, would push 32 million people into poverty, cause fertilizer shortages, reduce crop yields, and leave 45 million more people facing extreme hunger.

In the most severe scenario, where disruptions persist through the end of the year, "inflation skyrockets past 6%" and "growth plummets to 2%," he warned, saying the world would then "confront the specter of a global recession, with dramatic impacts on people, on the economy, and on political and social stability."

"The longer this vital artery is choked, the harder it will be to reverse the damage," Guterres said, adding that "every day that ships cannot move escalates these costs and amplifies their reverberations across the global economy."

On the UN efforts to protect maritime workers, Guterres said the secretary-general of the International Maritime Organization, Arsenio Dominguez, is developing a framework to securely evacuate ships and seafarers from the conflict zone, provided it is safe to do so.