Global markets are ignoring a major geopolitical shift amid rising tensions between the US and Iran. The Systematics report said that the current situation is not just a short-term fluctuation, but a sign of a major change in the global scenario, which may recur again and again in the future and maintain uncertainty for a long period.
The global market is swinging between hope and fear
According to the report, the markets are currently swinging between hope and fear on every war-related news, but a deep change is going on behind it. Changing policies in the US under President Donald Trump and Iran’s response have combined to create a situation where it has become difficult for investors to assess long-term risks.
The report described this as a major metamorphosis in the global geopolitical structure, with the balance of power shifting between the US and the China-led Global South. Due to this, such tensions and conflicts may be seen again and again in the future.
The direct impact of the crisis is visible on the energy market
On the economic front, the report has warned that the direct impact of this crisis is visible on the energy market. The price of Brent crude has reached around or above $100 per barrel, which reflects not only supply-related risks but also a growing geopolitical premium. According to the report, even if tensions ease, there may still be disruptions in the supply of crude oil and gas, due to which prices may remain high for a long time.
Huge debt is increasing the concern
Along with this, global debt is also becoming a major cause of concern. According to the report, global debt is projected to increase by nearly $29 trillion to a record $348 trillion by 2025, which could limit the ability of governments to provide economic stimulus.
What are the apprehensions about India?
Regarding India, the report specifically warns that high crude oil prices and weak demand together can create a situation of stagflation. This could impact recent economic reforms and increase pressure on the domestic economy. According to the report, India’s retail inflation rate may go above 6 to 7 percent in the coming months.
Finally the report has said that the current situation is not temporary. High oil prices, tight financial conditions and recurring geopolitical shocks may now become permanent features of the global economy, leading to a prolonged period of adjustment.