Conflict in the Middle East Prompts Concerns About Record-High US Inflation

1. The conflict in the Middle East could drive American inflation to record levels: Economists expect a sharp increase in the US Consumer Price Index (CPI) of around 1% for March 2026, reflecting the sudden surge in gas prices faced by American consumers. This spike is attributed to the conflict in Iran, which has raised pump prices by about $1 a gallon.

2. The appeal of Hong Kong’s IPO market: Hong Kong’s IPO market raised over HK$103 billion in the first quarter of 2026, ranking it first globally.

3. Gulf oil exports drop by over 50%: Disruptions in the Strait of Hormuz have led to a significant decrease in global oil flows, with Gulf countries’ crude oil exports by sea (excluding Iran) dropping by 49% in March 2026 compared to the previous month.

4. Non-oil economy in the Middle East stagnates due to conflicts: Conflicts involving Iran have disrupted trade and raised costs, resulting in the stagnation of the non-oil economy of the region in March 2026.

5. China promotes high-quality e-commerce development: The Chinese Ministry of Commerce, in collaboration with other agencies, recently released guidelines to enhance e-commerce’s role in the digital economy and sustainable economic growth.

6. Soaring fertilizer prices add pressure on European farmers: Europe’s fertilizer prices have sharply increased due to the Middle East conflict, impacting agricultural production costs significantly.

7. Japan takes cautious stance on interest rate hike amid inflation risks: The Bank of Japan is cautious about raising interest rates in April 2026 due to growing inflation risks linked to Middle East conflicts.

8. FAO warns of increased risks to global food security: The ongoing conflict in the Middle East could heighten risks to global food security, particularly for countries heavily reliant on food, fertilizer, and fuel imports.

9. South Korea sees a sharp rise in agro-food exports to the Middle East: Despite geopolitical uncertainties, South Korea’s agro-food exports to the Middle East jumped by over 30% in the first quarter of 2026.

10. ASEAN+3 better positioned to manage energy shock: The ASEAN+3’s macroeconomic research bureau foresees regional growth in 2026 and 2027, noting the region’s efficient energy use and low oil dependence.