US Inflation Forecast to Hit 6% Due to Hormuz Strait Crisis

Sat, 16 May 2026, 22:17 WIB | By Wisnu Arto Subari | Source: MEDIA_INDONESIA | Economy

Headline

Volatilitas tinggi masih berpotensi berlanjut hingga akhir Mei.

Global economic pressures are expected to further burden household budgets in the near future. Economists now project the Consumer Price Index (CPI) to surge to an annual rate of 6% in the second quarter of 2026, a significant increase triggered by geopolitical tensions.

Based on a survey of 33 professional analysts released by the Federal Reserve Bank of Philadelphia on Friday (May 15), this figure has more than doubled compared to pre-conflict forecasts in the Middle East, which were at 2.7%. This surge is also significantly higher than the inflation rate recorded in the first quarter of this year, which was 3.1%.

The report highlights that the closure of the Strait of Hormuz is triggering a chain reaction of price increases that is shaking global economic prospects. As a vital artery for world oil trade, disruptions in the region are causing energy supply shortages that directly impact the cost of distributing goods.

According to AAA data, fuel prices have risen by more than US$1.50 per gallon since February. This increase in transportation costs is starting to spread to various consumer product sectors. If these forecasts are accurate, current inflation would be the highest since 2023 and could potentially match the record high of 2022.

The high prices of goods and energy are beginning to hinder overall economic growth. Experts are now revising their projections for economic growth, measured by Gross Domestic Product (GDP), to 2.2% for 2026. This is down from previous forecasts that projected growth at 2.5%.

This situation puts monetary authorities in a difficult position to balance controlling inflation without triggering a deeper recession. For consumers, an increase in inflation to 6% means that real purchasing power will be sharply reduced if income increases do not keep pace with the surge in essential goods prices. (Investopedia/I-2)

The US Consumer Price Index (CPI) rose 0.6% in April 2026. Rising energy costs due to the war in Iran are raising concerns about delays in Fed interest rate cuts.

The Central Statistics Agency (BPS) recorded inflation of 0.13% month-on-month (m-to-m) in April 2026. Meanwhile, calendar year (y-to-d) inflation was recorded at 1.06%.

BPS recorded March 2026 inflation at 0.41% month-on-month. The food, beverage and tobacco group was the largest contributor to inflation.

Based on a release from the Central Statistics Agency (BPS), the Consumer Price Index (CPI) in Yogyakarta Province (DIY) experienced a deflation of 0.24% month-on-month (mtm) in August 2025, lower than in July 2025.

The Central Statistics Agency (BPS) revealed that there was deflation of 0.08% or a decrease in the Consumer Price Index (CPI) in August 2025.

ADNOC is accelerating the construction of the West-East oil pipeline to Fujairah Port to secure the export of UAE oil amid Iran’s blockade of the Strait of Hormuz.

The conflict in the Middle East has forced commercial ships to reroute to Africa, entering the Somali pirate attack zone. Operational costs have swelled by US$1 million per ship.

Pentagon officials acknowledged that Iran still threatens the Strait of Hormuz even though their military has been destroyed. The Epic Fury war has cost US$29 billion.

Trump also claimed that Xi had assured him that Beijing would not send military equipment to help Iran in the conflict involving the US and Israel.

The United States announced that it had diverted dozens of commercial ships and disabled several vessels as part of the implementation of a blockade against shipping through the Strait of Hormuz

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