IMF warns conflict could tip global economy into recession

The BBC's World Business Report delivers a stark warning from the International Monetary Fund (IMF) that ongoing conflict in the Middle East could push the global economy into recession, with oil, gas, and food prices remaining elevated for years. The IMF's latest World Economic Outlook projects a potential 2% global growth rate—below the 2.5% threshold considered a recession—driven by supply chain disruptions, energy shocks, and inflation exceeding 6%. Low-income energy importers and countries in the Gulf are especially vulnerable, with the crisis described as worse than the 1970s oil shock. The report urges governments to implement targeted, short-term fiscal measures due to limited war chests post-COVID and warns against broad interest rate hikes, though central banks remain poised to act if inflation spirals. Market reactions, however, show resilience, with oil prices dropping and equities hitting all-time highs, driven by real-time developments at the Strait of Hormuz rather than macroeconomic forecasts. Meanwhile, European airlines are lobbying the EU for emergency relief, including suspension of emissions trading, protection of flight slots, and exemption from passenger compensation due to fuel shortages and airspace closures. In tech, Amazon is acquiring Globalstar for $11.6 billion to expand its satellite-to-phone connectivity ambitions, directly challenging SpaceX’s Starlink. The episode also explores the cultural and economic complexities of tipping in the U.S., with a Milwaukee bartender explaining its role in supplementing wages and maintaining service quality, while raising concerns about transparency and financial record-keeping.