## 📈 Middle East War: Global Shockwaves Threaten Sri Lanka’s Recovery

The IMF warns of a "global yet asymmetric" economic shock as the Middle East conflict disrupts energy, trade, and finance, posing significant risks to energy-impoting nations. • Energy & Inflation Impacts Oil and Gas: Closure of the Strait of Hormuz has caused the largest oil market disruption in history. Cost Push: Higher fuel and power bills are raising production costs and squeezing purchasing power, reviving "cost-of-living" strains. Fertilizer: With 33% of global supply passing through the Gulf, disruptions threaten yields and push food prices higher. • Sector & Trade Disruptions Supply Chains: Rerouting ships increases freight costs, insurance premiums, and delivery times. ICT/BPM & Manufacturing: Potential shortages of helium and minerals could impact global semiconductors and electronic components. Tourism: Air-traffic disruptions around Gulf hubs are impacting global travel patterns. • Financial Strains Currencies: Balance-of-payments pressures are weighing on currencies in manufacturing-heavy Asian economies. Debt: Rising bond yields and tighter financial conditions increase debt-servicing burdens for countries with "meager reserves" and high debt. • Outlook The IMF notes that for fuel-importing economies, the shock acts as a "sudden tax on income," leading to slower growth and stickier inflation. Fuller assessments are expected in the April 14 World Economic Outlook.