The spectre of war between two global heavyweights – the United States and Israel – has cast a long shadow over the Middle East, its ripple effects being felt far beyond Iran's borders. The devastating human toll is stark: in Iran alone, the death count stands at over 3,300 lives lost, with more than 33,000 injured, and widespread destruction of vital infrastructure, including schools and healthcare facilities. Meanwhile, Lebanon has borne the brunt of Israeli attacks, which have claimed nearly 4,000 lives, displaced 1 million people, and left a trail of devastation in its wake.
The economic consequences are equally far-reaching: sharp increases in food and fuel prices are having a disproportionate impact on vulnerable communities around the world. A new index created by US Federal Reserve economists Dario Caldara and Matteo Iacoviello has tracked global tensions, revealing that the Iran war has been more destabilising than the COVID-19 pandemic. The conflict's failure to achieve regime change or curb Iran's nuclear ambitions has left governments and businesses reeling in its aftermath – a fragile peace deal having been announced, but with terms remaining shrouded in uncertainty.