Prolonged Regional War Threatens Global Stagflation: What Omani Investors and Businesses Must Prepare For
MUSCAT: Omani economic analyst Hamza bin Hussein al Lawati has warned that a prolonged conflict in the region could push the global economy into stagflation if it extends beyond one year, in an interview with Oman TV.
Al Lawati explained that the economic impact would vary depending on the duration of the conflict. A short conflict, lasting between four to seven weeks, would likely cause a temporary inflation spike that could subside once trade, shipping, and business activities stabilize. In this scenario, the effect on global economic growth would be limited to less than one percent.
However, if the conflict persists for three to seven months, the consequences could become more severe. Rising food prices, disruptions to gas exports, and complications in oil shipments are expected to trigger widespread inflationary pressures throughout the global economy.
He cautioned, “If the war continues for more than a year, the world will enter stagflation,” a harmful economic condition characterized by high inflation combined with weak growth.
Al Lawati noted the global economy was already fragile prior to the latest escalation, still grappling with the effects of earlier trade disruptions and instability in key maritime corridors such as the Red Sea.
Highlighting the strain on shipping and supply chains, he pointed to a sharp decline in vessel traffic through the Strait of Hormuz, one of the world’s most crucial energy and trade choke points.
The wider risk is significant because the Strait of Hormuz serves as a major artery for global oil and gas flows. Prolonged disruptions here could have far-reaching effects on energy markets, transportation costs, and industrial supply chains worldwide.
For Gulf countries, prolonged disruption of regional shipping lanes could affect more than just hydrocarbon exports; it also threatens to raise freight costs, impact food imports, and undermine business confidence, at a time when many regional economies are actively pursuing diversification and investment strategies.
Al Lawati emphasized that the economic repercussions would extend beyond energy markets into sectors such as fertilizers, agriculture, and manufacturing—all of which depend on stable energy supplies and consistent global trade routes.
He added that repeated geopolitical shocks are accelerating a structural transformation in the global economy, shifting away from traditional globalization towards more localized industries, stronger regional partnerships, and enhanced economic self-reliance.
تحلیل ویژه از عمانت | بازار عمان را کشف کنید
The prolonged regional conflict poses significant risks of stagflation, marked by high inflation and weak growth, which could severely disrupt Oman’s diversified economic ambitions. Smart investors and businesses should prioritize resilience in supply chains and explore opportunities in localized industries and regional partnerships to mitigate exposure to volatile global energy and trade routes. This geopolitical uncertainty underscores the strategic importance of accelerating Oman’s economic self-reliance and diversification plans.
