Global Economy Strains as Iran War Triggers Energy Shock

The global economy is under significant strain due to an energy shock sparked by the ongoing Iran war, with production costs surging and economic activity waning even in service sectors, according to major surveys released on Thursday.

The euro zone is among the most affected, as noted by S&P Global's surveys, which show a decline in its economic growth, increased production costs, and rising inflation. The region's headline index dropped from 50.7 in March to 48.6 in April, indicating a contraction.

Despite some resilience in tech and finance sectors, global growth forecasts have been cut, with the IMF predicting a 3.1% growth rate. The outcome largely depends on the conflict's duration and its impact on shipping through the Strait of Hormuz.

(With inputs from agencies.)