US Treasury secretary tells BBC ‘bit of pain’ worth long-term security
US Treasury Secretary Advocates for Economic Sacrifice in Pursuit of Long-Term Security
Scott Bessent, the US Treasury Secretary, expressed to the BBC that a modest economic sacrifice was necessary to counter the looming danger of Iranian nuclear threats against Western cities. As the International Monetary Fund (IMF) highlighted the possibility of a global economic downturn due to the escalating conflict between the US and Israel, Bessent underscored the importance of long-term security over short-term economic forecasts.
“I contemplate the potential GDP impact if a nuclear weapon struck London… My priority is long-term security, even if it means accepting some immediate economic strain,” he stated.
Iran maintains its nuclear program is entirely peaceful. The UK government reiterated that there was no conclusive evidence Iran intended to target Europe with missiles. Bessent, however, argued that the risk posed by Iran outweighed the economic consequences, citing the country’s demonstrated capability to launch mid-range intercontinental ballistic missiles.
“The most dangerous risk is one you’re unaware of. Now we know Iran has the means to reach London, and we know their intent,” he explained. According to Bessent, strikes by the US and Israel had effectively eliminated the “tail risk” of Iranian nuclear attacks on Western nations.
Recent reports from the IMF suggest that in a worst-case scenario, global growth could drop below 2% in 2026. This would bring the world close to a recession, which has occurred only four times since 1980, including during the recent pandemic. The fund warned that prolonged conflict could lead to rising inflation, increased unemployment, and food shortages in several regions.
IMF chief economist Pierre-Olivier Gourinchas noted that even a swift resolution to the war would have lasting effects, comparable to the 1970s oil crisis. While the impact on consumers would be less severe today due to reduced reliance on fossil fuels, the economic repercussions could still be significant.
Oil prices have surged near $120 during the conflict but have since retreated, with a barrel of crude currently trading at $95. Gourinchas added that the risk of recession would intensify if severe conditions persisted over two years. If the war concludes soon and Middle Eastern energy production stabilizes by mid-year, global growth is expected to moderate to 3.1% in 2026, slightly below an earlier projection of 3.3%.
The UK is anticipated to face the greatest economic strain from the energy shock linked to the Iran war. The IMF revised its UK growth forecast for this year to 0.8%, down from 1.3%. However, it projects a recovery to 1.3% in the following year. Meanwhile, oil-exporting nations in the Gulf are likely to experience a sharp slowdown or contraction in growth this year.
Iran’s economy is forecast to contract by 6.1% this year, but the IMF predicts a rebound of 3.2% in 2027, contingent on the war ending soon. On Sunday, US President Donald Trump declared a blockade of Iranian ports to support the ongoing conflict.