June 2026 Risk Review: A Breather in the Persian Gulf

As the Middle East enters a fragile period of reduced hostilities, the economic shock triggered by the conflict – supply chain disruptions, inflationary pressures, and market uncertainty – is already spreading across the global economy. Against this backdrop, Coface has implemented 8 country downgrades and 45 sector rating changes (41 downgrades versus only 4 upgrades).

Key figures

• +2.3%: expected global growth in 2026
• -0.6 percentage points: cumulative revision to the global growth forecast for 2026 and 2027
• USD 85 per barrel: projected average price of Brent in 2026 

A decline in geopolitical tensions does not mean a return to normal conditions 

After more than 15 weeks of conflict, the signing of the memorandum of understanding between the United States and Iran signals a period of calm for the Middle East, despite the region’s underlying fragility. However, this pause should not obscure the central issue: the duration and intensity of the conflict, which significantly exceeded initial expectations, have deeply disrupted a region that plays a critical role in the global economy.

The Strait of Hormuz remains a strategic chokepoint for the transportation of hydrocarbons and related products. Only a handful of countries, particularly in Southeast Asia and along the East African coast, have managed to avoid the consequences of these disruptions. Any return to normality, assuming it is achievable, will require time.

The global economy remains resilient but is losing momentum

So far, the global economy has absorbed the shock, largely thanks to precautionary inventory accumulation and demand adjustments. However, this buffer is beginning to wear thin. Production shutdowns in certain industries, renewed inflationary pressures, and tighter financial conditions are early signs of mounting challenges, while governments have limited capacity to support economic activity and household incomes.

Against this backdrop, Coface has revised its growth outlook downward to 2.3% for 2026 and 2.5% for 2027, representing a cumulative reduction of 0.6 percentage points over the two-year period.

Supply chains facing renewed pressure

The near closure of the Strait of Hormuz, with only 145 vessels passing through in May versus more than 3,300 a year earlier, has disrupted global transportation networks and once again placed supply chains under significant strain. Companies are already reporting longer delivery times, rising operating costs, and early signs of shortages, prompting precautionary stock-building despite its negative impact on cash flow and profit margins. In this environment, corporate insolvencies are expected to continue rising this year (+6% globally), with particularly sharp increases anticipated in countries such as the United States, France, and Japan.

Regional impacts vary significantly

While the shock is global in scope, its intensity differs considerably across regions. 

• In the Middle East, the Gulf states have been the most directly affected, experiencing sharp economic contractions due to their reliance on the Strait of Hormuz.
• In Europe, higher energy prices and prolonged uncertainty are weighing on domestic demand, with eurozone growth expected to reach only 0.7%.
• In the US, inflation has accelerated once again (from 2.4% in February to 4.2% in May), reducing purchasing power and weighing on spending by lower-income households.
• In Asia, the picture is mixed: some industries continue to perform strongly (South Korean semiconductor exports have risen by 153% since the beginning of the year), while others are struggling with margin compression.
• Finally, in emerging economies, particularly in Latin America, the shock has taken the form of renewed inflation and tighter monetary policies, as illustrated by Brazil, where the benchmark interest rate stands at 14.5%.

Jean-Christophe Caffet, Chief Economist at Coface 

Download the June 2026 Risk Review report to learn more.