world-economy

G-7 Finance Chiefs Signal Caution on Stimulus Amid Middle East Conflict

Finance ministers from the Group of Seven agreed to exercise restraint on fiscal spending as the Iran conflict threatens to derail global economic growth and stoke inflation. Officials warned that crude price spikes triggered by Middle Eastern tensions are creating downward pressure on economic expansion while simultaneously pushing prices higher across developed and developing economies. The balance between supporting growth and managing inflation concerns dominated discussions at the gathering. Pakistan's economy illustrated the dual challenge facing policymakers. Growth accelerated in recent quarters even as rising oil costs from the conflict clouded near-term prospects for energy-importing nations. Bond market volatility added to policymakers' concerns about global economic stability. The group's commitment to measured fiscal responses reflects caution that excessive stimulus could compound inflationary pressures already exacerbated by geopolitical supply shocks.