The conflict in the Middle East has driven up energy costs and disrupted supplies, putting pressure on Europe, which remains heavily dependent on imported fossil fuels. Amid surging inflation, the European Central Bank (ECB) has raised its key interest rate by 0.25 percentage points to 2.5%, while the European Union (EU) is pursuing strategies to strengthen its resilience to global energy shocks.

Conflicts in the Middle East and the blockage of the Strait of Hormuz have thrown the global aviation industry into a spiral of escalating fuel prices and declining travel demand, which is even predicted to continue after the conflict ends.

The Private Economic Development Research Board (Board IV) under the Prime Minister’s Advisory Council for Administrative Procedure Reform has submitted seven groups of solutions to the Prime Minister for consideration to help enterprises cope with the impacts of the Middle East conflict.

The European Union (EU)’s opposition to the US Inflation Reduction Act (IRA) has become a serious trade dispute between the two sides of the Atlantic. Although the US affirmed that its support for green industry would not aim to harm the EU, the tensions related to this issue are at risk of causing a significant rift in the alliance.

When the wounds caused by the COVID-19 pandemic have not yet healed, the world economy has been continuously subjected to a series of shocks including inflation, energy crisis, supply disruptions, and the risks of public debt. These dark clouds are casting a shadow over the prospect of recovery and growth, of the world economy in the coming time.

The inflation storm continues to be severe in the major economies of Southeast Asia and threatens the region's prospects for economic recovery following the COVID-19 pandemic.