"Devastating consequences of closing Hormuz" - UN Chief Guterres, appeal for return to normality
UN Secretary-General Antonio Guterres has warned of devastating consequences of prolonged disruptions in the Strait of Hormuz. In a press conference, Guterres offered three scenarios. In the worst-case scenario, where the strait remains closed until the end of the year, global inflation would exceed 6 percent and economic growth would fall to 2 percent.
Guterres warned that extraordinary suffering is looming, especially among the world’s most vulnerable populations, adding that the world faces the specter of a global recession, with dramatic impacts on people, the economy and political and social stability.
Guterres said these consequences are not cumulative but exponential. The longer this vital artery remains blocked, the harder it will be to reverse the damage and the higher the cost to humanity.
Even in the best-case scenario, "when restrictions are lifted today," supply chains will take months to recover, prolonging lower economic output and higher prices, he warned.
"Global economic growth this year will fall from 3.4 to 3.1 percent. Global inflation - which had been falling - will rise from 3.8 to 4.4 percent. And global merchandise trade growth will shrink from 4.7 percent last year to around 2 percent, with some significant supply chain disruptions," he said.
In a second scenario, where the closure of Hormuz lasts until mid-year, global economic growth would fall to 2.5 percent. Inflation would rise to 5.4 percent. An additional 32 million people would be pushed into poverty and another 45 million would face extreme hunger, he said.
As the Middle East crisis enters its third month, the consequences are worsening dramatically with each passing hour, despite a fragile ceasefire between the United States and Iran, he said.
Guterres called for the reopening of the Strait of Hormuz and urged all parties to refrain from actions that could undermine the current ceasefire.
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