Nevertheless, the announcement of the deal created a more positive outlook for global markets.
On Monday, Malaysian Economic Minister Akmal Nasrullah Mohd Nasir said that the recovery of global energy and economic stability is expected to take time due to infrastructure damage and disruptions to strategic trade routes caused by the U.S. war on Iran.
While welcoming the announcement of the U.S.-Iran peace deal, Akmal pointed out that the impact on the oil market and the global economy would not be immediate as the recovery process requires time.
“If it is true that a peace deal can be reached, its impact may take time because of the process of clearing routes in the Strait of Hormuz and repairing infrastructure damaged during the war. So, it will take time to fully recover,” he said.
Akmal explained that the Strait of Hormuz is a vital route for global oil trade, and any disruption in the area carries implications for energy costs and inflationary pressures in many countries, including Malaysia.
He said the ministry would continue to monitor developments and maintain mitigation measures to ease economic pressures, including through the National Economic Action Council.
“We remain committed to exploring the roles we can play to ease the ongoing pressures until the situation provides a clearer picture that this crisis has truly ended,” he said.
Earlier, Pakistani Prime Minister Shehbaz Sharif confirmed that the United States and Iran had reached a peace agreement following intensive negotiations, with an official signing ceremony scheduled for June 19 in Switzerland.
U.S.-Iran Deal Significant Development for Global Economy
On Monday, Pakistan’s Finance Minister Muhammad Aurangzeb said that the announcement of a peace deal between the United States and Iran is a significant development for the global economy and is expected to improve Pakistan’s economic outlook.
Addressing virtually a ceremony held at the Pakistan Stock Exchange, the minister said the confidence reposed by the U.S. and Iran in Pakistan’s leadership reflects the country’s constructive diplomatic role.
Referring to the signing of the deal between the two countries later this week, Aurangzeb said the development carried encouraging implications for Pakistan’s economy and for broader regional stability.
“Over the last three months, Pakistan had effectively navigated the first-order economic impact of the conflict and expressed confidence that the agreement would help mitigate concerns regarding secondary and tertiary economic effects that had earlier been anticipated,” he said.
While noting that disruptions to energy infrastructure would require time to normalize fully, the Pakistani minister said the announcement nevertheless created a more positive outlook for economic activity and presented encouraging upside potential for the next fiscal year.
Source: Xinhua
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