US-Iran Conflict Worsens Global Economy, Bank Indonesia Chief Predicts Slowdown

Bank Indonesia Governor Perry Warjiyo has revealed that global economic growth prospects are dimming as a result of the conflict between Iran and the United States and Israel.

He estimates that global economic growth this year will slow considerably due to the Middle Eastern conflict, with projections revised to 3.1%, down from the previous forecast of 3.2%.

“Global economy at 3.1% from the previous 3.2%, despite the reduction in US reciprocal tariffs,” said Perry during a press conference on the results of Bank Indonesia’s board of governors meeting in Jakarta on Tuesday, 17 March 2026.

Perry emphasised that the Middle Eastern conflict is driving a spike in crude oil prices worldwide, thereby constraining global economic activity. Meanwhile, inflation is also rising, accompanied by increased yields on government debt securities globally.

“This lowers global economic prospects and increases global inflation as well as increasing treasury yields and capital outflows from emerging markets,” he stressed.