Why in News?
The ongoing Iran War (2026) has created disruptions in global energy supplies, especially oil. This has raised concerns among economists about a possible stagflation scenario, which combines inflation with economic slowdown.
What is Stagflation?
- Stagflation is a rare economic condition where:
- Economic growth is slow or stagnant
- Unemployment is high
- Inflation is high simultaneously
Impact of Iran War on Global Economy
- The conflict has affected oil supply routes and production.
- Leads to increase in global crude oil prices.
- Causes higher fuel and transportation costs worldwide.
- Triggers inflationary pressures in many countries.
- May slow down global economic growth due to rising costs.
To understand more about Stagflation, Click here
