UN presses for talks amid recession fears

United Nations Secretary-General Antonio Guterres warned on Thursday that the world is "confronting the specter of a global recession" as disruptions in the Strait of Hormuz persist, urging all parties to "let the global economy breathe again".

Speaking at UN headquarters, Guterres listed three scenarios tied to the duration of the Middle East crisis, now in its third month. Even in the best case — where restrictions are lifted immediately — global growth would still fall from 3.4 percent to 3.1 percent this year, with inflation rising to 4.4 percent, he said.

Should the crisis extend through midyear, an estimated 32 million people could be pushed into poverty and a further 45 million face extreme hunger. If it continues through the end of the year, global growth could fall to 2 percent and inflation could exceed 6 percent.

"These consequences are not cumulative. They are exponential," Guterres said, adding that developing countries will be hit hardest.

He urged all parties to comply with UN Security Council Resolution 2817. "Open the Strait. Let all ships pass," he said.

In a further appeal on Friday, Guterres cautioned on X that the fallout from the crisis is worsening "with each passing hour", calling for dialogue and urgent steps "to pull us back from the brink" and open a pathway to peace.

The warning came as US President Donald Trump signaled restarting the war, asserting that Iranian leaders "want to make a deal badly".

Iran has delivered a new proposal for talks with the US via mediator Pakistan, the official Islamic Republic News Agency reported on Friday, without elaborating.

"Global recession, as emphasized by the UN secretary-general, poses a major threat," said Deniz Istikbal, an assistant professor and economics researcher at Istanbul Medipol University in Turkiye.

Rising inflation could reignite the crises that followed the pandemic and the conflict in Ukraine, he said.

"If the cost of war leads to job losses and high energy prices, the normalization of the global economy may take a long time," he said. "Less developed and developing countries, in particular, may be more adversely affected."

The crisis "must be resolved quickly" and "diplomatic channels should be actively utilized", he added.

Separately, the World Bank said on Tuesday that overall commodity prices are projected to rise by 16 percent this year, driven by soaring energy and fertilizer prices and record highs in several key metals.

Economic ministers of the Association of Southeast Asian Nations said in a joint statement on Thursday that developments in the Middle East are increasingly affecting people and businesses across the region, particularly micro, small and medium-sized enterprises, with significant implications for overall economic growth.

They said rising energy and transport costs "are cascading into food systems, particularly the increased fertilizer prices and potential disruptions in fertilizer supply chains", affecting affordability and timely access for farmers ahead of key planting seasons, potentially leading to lower agricultural productivity and disruptions to essential food supply.

Policy responses

"We, therefore, underscored the urgent need to alleviate the impact on the people through timely, targeted and inclusive policy responses, including enhanced regional cooperation on fertilizer availability, access and supply chain information," the statement said.

On Wednesday, European Commission President Ursula von der Leyen said the US-Israel war on Iran was costing the European Union almost 500 million euros ($590 million) a day, raising fuel prices and fears of jet fuel shortages within weeks, The Associated Press reported.

Meanwhile, Iranian President Masoud Pezeshkian said the US naval blockade amounts to an extension of military operations against a nation "paying the price for its steadfastness and independence", calling the approach "intolerable".