Charting the global economy: Extensive growth toll from Iran war

Sentiment among the world’s service providers and manufacturers took a synchronized step down during the first month of the Iran war, with business surveys growing pessimistic about economic growth as oil prices surge.

Purchasing manager surveys from Australia to India to Europe and the US offered an initial snapshot of the reverberations of the conflict that has taken an immediate and crushing toll on energy supplies crucial to the functioning of some of the world’s biggest economies.

Here are some of the charts that appeared on Bloomberg this week on the latest developments in the global economy, markets and geopolitics:

World

The world economy’s first signs of a synchronized shock emerged in business surveys revealing how the Iran war’s fallout is crippling growth momentum and stoking prices. Multiple purchasing manager indexes compiled by S&P Global for March showed marked declines. Several price readings surged meanwhile, with input cost inflation in Germany, Europe’s biggest economy, quickening to the fastest pace in more than three years.

US

Treasury Secretary Scott Bessent regularly says his motivation to get “out from behind my desk” and enter public service was concern about growing US debt. Developments over the past several weeks have left those alarms ringing even louder.

More than 40% of oil executives surveyed by the Federal Reserve Bank of Dallas this past fall said their operations had been affected by theft during the previous year, with several dozen petroleum-product arrests now made annually, up from perhaps a single arrest per year a decade ago, Texas Department of Public Safety records show. Some estimate annual oil theft in Texas at around $1 billion.

Four in 10 US counties shrank last year as President Donald Trump’s immigration crackdown continued to stifle the nation’s main source of population growth. Some of the steepest numerical declines were in counties that include major cities with large immigrant populations, like Los Angeles, San Diego, Miami, Dallas and New York.

Europe

UK inflation held at an 11-month low before the war in Iran sent motor fuel costs soaring and threatened to deliver another shock to household finances. The UK central bank expects a surge in petrol prices to immediately push up inflation to 3.5% in March before gas and electricity bills climb when the UK’s energy price cap is updated in the summer.

Finland posted another set of dire labor-market figures, with the European Union’s worst unemployment hitting levels previously seen during the first wave of the Covid-19 pandemic. The headline jobless rate rose to 10.9% in February, the highest in almost six years.

Norway’s central bank opened the door to an interest-rate hike this year and even discussed an immediate move to tame inflation, prompting analysts to scrap their forecasts for more easing this year. The decision to scrap an earlier plan for three cuts by the end of 2028 puts Norges Bank at the vanguard of rich-world peers pivoting toward potential tightening in the wake of the Iran crisis as inflationary risks are mounting.

Asia

An investment boom in artificial intelligence has kept China’s trade volumes on a path to exceed last year’s record levels, offsetting disruptions from higher oil prices in the weeks after war broke out in Iran. Nearly 20 million containers moved through Chinese ports in the first three weeks of March, an increase of more than 6% from the same period a year ago.

Hundreds of service stations across Australia have reported fuel shortfalls, as the war in the Middle East disrupts global supplies. At least 600 retail sites across the country have run out of at least one type of fuel, Energy Minister Chris Bowen told parliament on Tuesday.

Emerging Markets

Mexico’s central bank resumed its monetary easing cycle after a brief pause, signaling concern over a weakening economy even as consumer inflation accelerates. Banxico, as the bank is known, cut its key rate by a quarter point to 6.75% in a closely divided decision on Thursday. The cut was expected by 15 of 31 economists surveyed by Bloomberg, while the others predicted a hold.

Turkey’s central bank is preparing an expanded toolkit to defend the lira from Iran war-related volatility that includes potentially tapping its vast gold reserves, according to people familiar with the matter. The bank has held discussions about conducting gold-for-foreign currency swap transactions in the London market, the people said, asking not to be named because the deliberations are private.