US Treasury secretary tells BBC ‘bit of pain’ worth long-term security

US Treasury Secretary Advocates Economic Sacrifice for Global Security

Scott Bessent, the US Treasury Secretary, emphasized to the BBC that a “modest economic hardship” was essential to counter the danger of Iranian nuclear threats targeting Western cities. Amid warnings from the International Monetary Fund (IMF) that the US-Israel conflict with Iran could push the global economy into recession, Bessent argued that long-term security gains outweighed immediate economic costs.

“I consider the impact on global GDP if a nuclear strike hit London to be a significant concern. However, I am more focused on the broader security implications, which are far more critical in the long run,” he stated.

Iran maintains its nuclear program is entirely peaceful, while the UK government noted there was “no evaluation” indicating Iran aimed to attack Europe with missiles. Bessent, however, prioritized the risk Iran poses over the economic fallout, citing evidence from the recent missile strike at Diego Garcia.

“We now have clear proof that Iran possesses mid-range ballistic missiles capable of reaching London, and they are actively pursuing nuclear capabilities,” he added.

According to the IMF, a worst-case scenario involving sustained high oil, gas, and food prices could reduce global growth below 2% in 2026. This would mark a near-recession, with only four such events recorded since 1980, the latest being during the pandemic. Energy prices surged after the Strait of Hormuz route was disrupted and peace talks between the US and Iran stalled, though they have since retreated.

IMF chief economist Pierre-Olivier Gourinchas warned that prolonged conflict would lead to rising inflation, unemployment, and food shortages. Even a swift resolution, he said, would still leave the world vulnerable to oil supply shocks comparable to the 1970s embargo. Yet, he noted that reduced reliance on fossil fuels has mitigated the impact on consumers.

The IMF projected global growth would ease to 3.1% in 2026 if the conflict resolved quickly and energy production normalized by mid-year, slightly below an earlier forecast of 3.3%. Its 2027 growth outlook remains unchanged at 3.2%. The UK, however, faces a sharper decline, with its 2026 growth estimate cut to 0.8% from 1.3%, though recovery is expected to reach 1.3% next year.

Oil-exporting Gulf nations are anticipated to experience a notable slowdown this year, while Iran’s economy is forecast to contract by 6.1%. A rebound of 3.2% in 2027 depends on the war ending soon, though this remains uncertain. On Sunday, US President Donald Trump announced a blockade of Iranian ports to…