BIS: Hormuz Strait blockade could have long-term impact on global economy

A historic blockade of the Strait of Hormuz has triggered a crisis in energy and raw material supplies, posing a new threat to the global economic outlook, according to a report released by the Bank for International Settlements (BIS) on June 28. The BIS noted that while geopolitical tensions have somewhat eased and oil prices have fallen sharply, the impact of this shock could persist. The report assessed that the global economy showed relatively strong resilience early this year, buoyed by optimism about advancements in artificial intelligence (AI) and better-than-expected global trade performance. However, the BIS pointed out that while AI could boost future productivity, the related optimism may not last long, and the current trend of large-scale capital investment may be difficult to sustain if supply bottlenecks continue to constrain production.