Middle Eastern Conflict Deepens Economic Challenges for France and Global Markets

The ongoing conflict in the Middle East, particularly stemming from tensions in Iran, is escalating economic pressures globally and in France. The World Bank's latest Global Economic Prospects report warns of the lowest global growth rates since the COVID-19 pandemic, projecting global GDP growth at 2.5% for 2023, down from 2.9% in 2025. This slowdown is driven mainly by surging energy prices, with oil prices set to average $94 per barrel in 2023, a 36% increase over 2025 levels. As a result, global inflation is expected to rise to 4.0%, potentially reaching 4.4% if energy supply disruptions worsen, which could further slashes growth to just 1.3% by 2026.

The conflict's ripple effects are particularly severe for sub-Saharan Africa due to rising food prices linked to fertilizer shortages and for Gulf economies, whose growth could plunge from 3.9% to nearly zero. The World Bank also highlights a looming 'lost decade' for developing countries, many of which have struggled economically since 2019 and remain dependent on foreign aid.

In France, Bpifrance Le Lab’s analysis underscores the heightened economic uncertainty this conflict generates. The French economy, stagnating since early 2026, faces growth of just around 0.8% for the year, largely contingent on how long the conflict lasts and energy price trends. Key sectors such as transport, agriculture, and energy-intensive industries are especially vulnerable to rising costs. On a positive note, French exporting small and medium enterprises (SMEs) show resilience, benefiting from strong cash flows and international growth potential despite the global instability.

Credit availability for businesses improved in 2025 with a 9% increase in lending, though investment in certain sectors has declined, and venture capital saw a 5% drop, notably impacting green technology and fintech sectors. Strategic adoption of artificial intelligence and expansion of regional trade may offer pathways for economic recovery amid this turbulence.

Together, these analyses confirm the profound economic impact of the Middle Eastern conflict. The global economy faces intensified inflation and slowing growth, with France navigating a delicate path to preserve growth and support businesses amid soaring energy prices and geopolitical risk.