Global inflation still at risk even if US-Iran ceasefire proves lasting⁠

The structural damage on global supply chains threatens to fuel inflation worldwide for years to come, even if the fragile, two-week ceasefire between the US and Iran holds, according to an expert.

US President Donald Trump announced a temporary ceasefire in the early hours of Wednesday, following weeks of escalating war in the Middle East.

Global markets rallied at the announcement, with oil dropping sharply, while subsequent reports of Iranian ceasefire violations reignited global risk concerns.

Economists say ending the active conflict will not be enough to solve the logistical bottlenecks and infrastructure destruction paralyzing the Middle East.

The effective closure of the Strait of Hormuz and the destruction of energy and public infrastructure disrupted markets, fueled financial volatility, and weakened the 2026 growth outlook, according to a World Bank report on Wednesday.

High energy costs impacted production, reduced domestic demand, damaged consumption growth, affected investments, lowered productivity, constrained private sector dynamism, and presented difficulties in the labor market.

Arzu Al, an international relations professor at Marmara University, told Anadolu that fear-driven speculative pricing began to ease, but the resistance to downward price movements shows that real economic recovery will be a long-term and structural process.

Al stated that the global economic architecture is shifting away from cost efficiency toward a security-focused model, which is expected to permanently drive up the baseline cost of global trade.

Even if the ceasefire becomes permanent, the risks of the ongoing conflict, alleged mines in the Strait of Hormuz, and security concerns remain as operational obstacles — rising shipping costs, high insurance premiums, and freight costs continue to strain the already existing backlog of ships receiving new transit requests, with the recovery of the supply-demand balance being delayed.

The severe physical impact is preventing freight costs from returning to pre-war levels.

Central banks around the world are forced into a corner in their attempts to prevent persistent supply shocks from triggering an inflation crisis.

“Losses in production capacity and insurance costs will prolong recovery, while the deep scars left in the wake of regional tensions and the pursuit of strategic resilience continue to make it more difficult for the market to establish an equilibrium,” she said.

Al stated that expectation management has been the most powerful tool used to stop the loss of confidence in the market and bring pricing behavior under control.

“The trajectory of the output gap shapes the resolve to combat the economic slowdown, while upwards revisions show how long interest rates will remain high,” she said.

“The possibility of a rate hike still remains if cost-push pressures are passed onto wages and price hikes take on a structural nature — rare cut expectations led by the political calendar clash with the actual costs of the supply crisis, thereby weakening predictability, while ensuring global stability necessitates keeping decisive and restrictive measures in place,” she added.

* Writing by Emir Yildirim