The conflict in the Middle East has provided a true test of the resilience of the global economy

By Adi Imsirovic, Lecturer in Energy Systems, University of Oxford
Antonio Fatás, Professor of Economics, INSEAD

The world economy survived the shocks of the Ukraine-Russia conflict, which has had limited impact on economic growth. But the escalation of hostilities in the Middle East has transformed what had been, until early 2026, a surprisingly benign outlook into a far more uncertain one. It has created the ultimate test for how resilient the world economy really is.

Amid stalled ceasefire negotiations, the US president, Donald Trump, has threatened a…

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