Here are the latest global economic developments on Friday, around 6:00 PM GMT, on the 35th day of the Middle East conflict:
Trump requests a defense budget of $1.5 trillion from Congress
President Donald Trump is asking Congress for a 42% increase in the US defense budget in 2027, a staggering amount, as revealed in documents released by the White House.
If his proposal is approved by lawmakers, American military spending would rise by $445 billion to $1.5 trillion next year.
Non-military spending, on the other hand, would decrease overall by 10% in 2027, with cuts planned in various social programs.
Most passages through the Strait of Hormuz are linked to Iran
Since the start of the war in the Middle East, six out of ten raw material transport ships passing through the Strait of Hormuz either came from Iran or were headed there, according to an analysis by AFP based on data from the maritime data company Kpler.
As for the other countries of departure or destination, they are far behind: United Arab Emirates (20% of all passages), China (15%), India (14%), Saudi Arabia (8%), Oman (8%), Brazil (6%), Iraq (5%).
According to maritime tracking data consulted by AFP on Friday, a CMA CGM container ship and a Japanese methanier sailed through the Strait of Hormuz on Thursday for the first time since its near closure by Iran following the outbreak of the war in the Middle East.
Emirates: Production at one of the world’s largest aluminum sites severely disrupted
Emirates Global Aluminium, targeted last week by an Iranian drone and missile attack, announced on Friday that a “full recovery” of its production could take “up to 12 months.”
The Al Taweelah site, targeted in the attack which resulted in several injuries, is among the world’s largest for aluminum production and has suffered “significant damage,” the company stated.
Iran has claimed several attacks on foundries in the United Arab Emirates and Bahrain since the start of the war, stating that they play a role “in supplying the military industries of the American army,” according to the Revolutionary Guards.
Italian central bank fears recession
Italy would enter a recession if the war in the Middle East were to prolong, according to a worst-case scenario presented on Friday by the Bank of Italy.
For now, the central bank has slightly revised down its growth forecasts due to the “sharp rise in energy prices.” It estimates that Italy’s GDP will increase by 0.5% both this year and in 2027 (compared to +0.6% expected for 2026 and +0.8% for 2027), and by 0.8% in 2028. Inflation is expected to rise to 2.6% in 2026, compared to +1.4% previously projected.
However, the Bank has prepared a worst-case scenario where the war would have “more pronounced and prolonged effects,” with oil staying above $120 per barrel throughout 2026: Italy would then experience zero growth in 2026, with inflation close to 4%, and enter recession in 2027 with a GDP decline of about 0.5% for the year.
Fuel prices: France asks the Commission to investigate possible abuses by European refineries
French Economy Minister Roland Lescure announced on Friday that he had written to the European Commission to request an investigation into the margins of refineries in Europe and to ensure that there were “no abuses,” in the context of the surge in fuel prices linked to the war in the Middle East.
Israel resumes operations at the Leviathan gas field
Israel has announced the resumption of operations at the vast Leviathan gas field, located off its coast, which had been suspended at the start of the Middle East conflict.
“The supply of natural gas to the local economy continues and will now be strengthened through the integration of an additional platform into the production system,” the Israeli Ministry of Energy stated.
