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Strait of Hormuz Disruptions: Beyond reopening – lasting impacts on vulnerable economies

The reopening of the Strait of Hormuz would bring much-needed relief for many economies.

This is a first step toward a progressive recovery of energy markets and international trade. However, during more than 100 days of shipping disruption, negative effects have already rippled through the global economy.

Vulnerable economies have been particularly exposed to oil and fertilizer price shocks. These shocks can result in persistent inflation. People suffer from inflation, especially the poor. It squeezes household budgets and makes necessities–such as food and healthcare–less affordable.

The reopening paves the way for recovery. But for vulnerable economies, the path can be longer, uneven and costly. International support is needed to improve their ability to cope.

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