Global conflicts have cost the world economy almost $850 billion over 2025 and 2026 as businesses are rattled by uncertainty, forcing them to halt spending.<\/p>\n
Data from the International Chamber of Commerce showed how uncertainty from conflicts, such as the war in Ukraine or the Middle East, has resulted in lost business opportunities.<\/p>\n
It comes as tensions over the Strait of Hormuz sends oil prices soaring while aircraft are restricted from flying huge swaths of global air space.<\/p>\n
ICC secretary general John Denton, a former Australian diplomat and business veteran, said this uncertainty significantly weighed on the global economy.<\/p>\n
\u201cLast year in 2025, the actual cost in economic activity destroyed was about US$200 billion (AU$284 billion),\u201d Mr Denton told Business Weekend.<\/p>\n
\u201cThis year in 2026, it’s going to be closer to US$380 billion (AU$540 billion).<\/p>\n
\u201cThat’s almost US$600 billion (AU$850 billion) worth of economic activity destroyed by the lack of certainty.\u201d<\/p>\n
The setback comes as the International Monetary Fund has been forced to soften its outlook for global growth to 3.1 per cent in 2026 and 3.2 per cent next year.<\/p>\n
Mr Denton said the IMF is making a \u201cheroic assumption\u201d by forecasting the Strait of Hormuz will reopen in the first quarter of 2027 and growth will pick up to 3.7 per cent next year.<\/p>\n
\u201cThat’s a heroic assumption, but even then, that’s lagging what we need,\u201d he said.<\/p>\n
He noted that trade has continued to rise, but argued the global business community was not in a \u201crobust trading environment\u201d that would facilitate a booming economy.<\/p>\n
\u201cIt’s the uncertainty and that is actually at a peak level,\u201d Mr Denton said.<\/p>\n
\u201cWe have not seen this amount of conflict for some time and the conflict is happening in a time when the institutions which could possibly help govern better and enable better solutions to the conflict are not functioning at the level they should.\u201d<\/p>\n
Despite the massive expense of global conflict and the uncertainty this brings, Mr Denton noted the cost of war was declining.<\/p>\n
He pointed to the cheaper production costs for equipment and various workarounds economies can muster to avoid the fiscal blowback of the restrictions of a conflict.<\/p>\n
\u201cIf you think about the asynchronous and the asymmetrical way in which war is being fought now, it’s actually being fought by some of the participants at a lower cost,\u201d Mr Denton said.<\/p>\n
\u201cThe cost for drones is simply lower. The actual cost of militarising choke points is actually not as expensive as people would think.<\/p>\n
\u201cSo you’re going to see more of that because it’s a lower cost.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Global conflicts have cost the world economy almost $850 billion over 2025 and 2026 as businesses are rattled…\n","protected":false},"author":2,"featured_media":948124,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[515809,4891,501678,10968,515820,89838,433238,442774,515818,515817,515808,515811,466604,515827,515813,515824,381082,515835,1156,515832,64,515834,515846,515831,63,515845,99,515833,398079,5612,32092,295676,5215,6901,26784,2458,515825,3978,85796,105186,164,17016,528,515842,194269,515819,5305,124580,208,256247,515823,7301,515829,515815,515828,515836,45755,515839,515840,515822,155207,26473,1861,20246,378904,380089,5939,189360,515807,515841,515816,515810,376537,378384,387902,515821,515814,449805,515844,382943,515812,515830,382975,380950,428986,515826,376443,515843,480703,381323,377051,411351,314784,54798,405586,507254,391569,364611,576,5525,38119,515837,515838,6900],"class_list":["post-948123","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-850-billion","tag-4891","tag-2025-and-2026","tag-10968","tag-2026-and-3-2","tag-89838","tag-3-1","tag-3-7","tag-600-billion","tag-a-heroic-assumption","tag-a-robust-trading-environment","tag-a-booming-economy","tag-a-conflict","tag-a-former-australian-diplomat","tag-a-lower-cost","tag-a-peak-level","tag-a-time","tag-about-us200-billion","tag-aircraft","tag-almost-850-billion","tag-au","tag-au284-billion","tag-au540-billion","tag-au850-billion","tag-australia","tag-better-solutions","tag-business","tag-business-veteran","tag-business-weekend","tag-businesses","tag-cent","tag-certainty","tag-commerce","tag-conflict","tag-conflicts","tag-data","tag-devastating-events","tag-drones","tag-economic-activity","tag-economies","tag-economy","tag-equipment","tag-getty-images","tag-global-air-space","tag-global-conflict","tag-global-conflicts","tag-global-economy","tag-global-growth","tag-growth","tag-hormuz","tag-huge-swaths","tag-icc","tag-icc-secretary-general-john-denton","tag-international-chamber-of-commerce","tag-its-outlook","tag-john-denton","tag-last-year","tag-lost-business-opportunities","tag-militarising-choke-points","tag-mr-denton","tag-next-year","tag-oil-prices","tag-people","tag-picture","tag-snapp-business","tag-some-time","tag-spending","tag-tensions","tag-the-actual-cost","tag-the-asymmetrical-way","tag-the-asynchronous","tag-the-cheaper-production-costs","tag-the-conflict","tag-the-cost","tag-the-first-quarter","tag-the-fiscal-blowback","tag-the-global-business-community","tag-the-global-economy","tag-the-human-and-economic-toll","tag-the-imf","tag-the-institutions","tag-the-international-chamber","tag-the-international-monetary-fund","tag-the-lack","tag-the-level","tag-the-massive-expense","tag-the-middle-east","tag-the-participants","tag-the-restrictions","tag-the-setback","tag-the-strait","tag-the-uncertainty","tag-the-war","tag-the-world","tag-the-world-economy","tag-this-amount","tag-this-uncertainty","tag-this-year","tag-trade","tag-ukraine","tag-uncertainty","tag-us380-billion","tag-various-workarounds","tag-war"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/948123","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=948123"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/948123\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/948124"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=948123"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=948123"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=948123"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}