The International Monetary Fund has lowered its global growth forecast for 2026 from 3.3 to 3.1 percent, citing the economic fallout from the United States-Israeli war on Iran and the closure of the Strait of Hormuz. The conflict has disrupted vital energy exports and damaged Gulf infrastructure, while a prolonged war could push global growth down to 2.5 percent. Low-income and developing nations are expected to suffer most from rising energy and commodity prices, and global shipping faces additional strain.

Despite the downturn, several industries are thriving amid the turmoil. Wall Street banks such as Morgan Stanley, Goldman Sachs, and JP Morgan Chase reported double-digit profit increases in early 2026, driven by heavy trading activity. The crypto-based prediction platform Polymarket has also surged, earning millions in daily fees from users betting on geopolitical outcomes. Meanwhile, global defence firms are benefiting from rising military spending, and the AI sector remains resilient, with Taiwan’s chip exports and TSMC’s profits reaching record highs.

The war has also accelerated the global shift toward renewable energy. Governments across Asia are implementing emergency measures and new incentives to reduce dependence on fossil fuels, driving a 70.92 percent annual rise in the S&P Global Clean Energy Transition Index.