Impact of Hormuz crisis on global economies
Japan's economic growth slowed to around 1% in the second quarter of 2026, driven by a decline in household consumption—which accounts for more than 50% of the economy—and a 1.2% decrease in corporate capital expenditure. This slowdown is attributed to disruptions in global supply chains resulting from the Middle East war, as well as rising food and energy prices, with only modest support from exports. Additionally, core inflation is expected to rise to 1.8% in July, placing the Bank of Japan at a crossroads between raising interest rates or accepting ongoing inflation and its impact on the economy. The crisis is also linked to a severe shortage of essential motor oils in Germany, threatening the automotive industry due to supply chain disruptions and rising costs, emphasizing the need to end the war between the U.S. and Iran to restore supply flows.
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