Smoke rises after an Israeli airstrike in south Lebanon, Friday, March 27, 2026. (AP Photo/Hussein Malla)It is almost exactly a month since the United States and Israel started their military campaign in Iran — a move that has upended all markets, whether one trades in stocks, government bonds or commodities like gold or indeed, energy.The war is currently in a state of slight lull as US President Donald Trump claims he has extended the deadline for Iran to open the Strait of Hormuz and allow the passage of fuel, but it appears nowhere near a resolution. Countries are bearing the economic brunt on a spectrum, based on their respective vulnerabilities. The Indian rupee, for instance, has rapidly lost value against the US dollar. In just the past month, the rupee has lost almost 4% of its value and is trading at 94.6 rupees to a dollar.For perspective, the Indian rupee has historically lost 2 to 3% of its value against the dollar in a year. Over the past year, as trade and tariffs played havoc, the rupee has lost more than 10% against the dollar. Over the past month, the rupee has also lost against most other currencies as well — be it the Chinese yuan, Japanese yen, the euro, or the British pound (see CHART 1). Rupee compared to other currencies.But exchange rates are essentially symptoms; their movement suggests changes in the underlying economy. So which economies, if any, are the winners of this conflict and, amongst those that are getting hit, which are getting hit the most? The Organisation for Economic Co-operation and Development (OECD) has released an “interim economic outlook” attempting to answer this precise question.On the question of overall economic growth, measured by growth in real gross domestic product or GDP, the OECD analysis throws up some very interesting results, even though it does not provide data for two of the three countries (Israel and Iran) most directly involved in the conflict.TABLE 1 shows that while the global GDP growth rate may appear “resilient” (read unchanged since before the start of the war in December) on the whole, this status quo hides a lot of changes. Countries such as India and Brazil, which were already expected to decelerate in 2026, will lose another sliver of pace. How countries may grow.The biggest losers will be the traditional US allies — European Union countries and the United Kingdom. The euro area is expected to lose as much as 0.4 percentage points of growth rate, which makes for a sharp deceleration given that Europe has largely stagnated and often teetered on the brink of a recession. The UK, which left the EU to chart its own destiny and is the US’s closest ally, is hit even worse, standing to lose half a percentage point of growth.Story continues below this adLast week's GDP column | Amid West Asia war, why central banks are between a rock and hard placeIt is quite remarkable that the two biggest military and trade adversaries of the United States, Russia and China, are likely to either be unaffected by this war or, as in Russia’s case, get a bit of growth boost.Finally, the most remarkable result is that the US’s GDP growth rate will actually get the biggest boost from this conflict, one-third of a percentage point. So while its GDP growth rate was set to moderate in 2026, the degree of deceleration will be lower now, thanks to this conflict.While overall growth is the key metric, inflation is likely to spike as the first effect of this conflict. But barring Saudi Arabia (which has rich domestic oil reserves), most countries are likely to face significant spikes in inflation. India’s inflation, which was around 2% in 2025, is likely to spike to 5.1% in 2026 — an increase of 1.7 percentage points from the December outlook when observers pencilled in an inflation rate of 3.4%, which would have been comfortably below the RBI’s target rate of 4%.Across the developed world — the US, EU and countries such as Japan and Korea — are likely to see their inflation rates move up by well over 1 percentage point.Udit Misra is Senior Associate Editor at The Indian Express. Misra has reported on the Indian economy and policy landscape for the past two decades. He holds a Master’s degree in Economics from the Delhi School of Economics and is a Chevening South Asia Journalism Fellow from the University of Westminster. Misra is known for explanatory journalism and is a trusted voice among readers not just for simplifying complex economic concepts but also making sense of economic news both in India and abroad. Professional Focus He writes three regular columns for the publication. ExplainSpeaking: A weekly explanatory column that answers the most important questions surrounding the economic and policy developments. GDP (Graphs, Data, Perspectives): Another weekly column that uses interesting charts and data to provide perspective on an issue dominating the news during the week. Book, Line & Thinker: A fortnightly column that for reviewing books, both new and old. Recent Notable Articles (Late 2025) His recent work focuses heavily on the weakening Indian Rupee, the global impact of U.S. economic policy under Donald Trump, and long-term domestic growth projections: Currency and Macroeconomics: "GDP: Anatomy of rupee weakness against the dollar" (Dec 19, 2025) — Investigating why the Rupee remains weak despite India's status as a fast-growing economy. "GDP: Amid the rupee's fall, how investors are shunning the Indian economy" (Dec 5, 2025). "Nobel Prize in Economic Sciences 2025: How the winners explained economic growth" (Oct 13, 2025). Global Geopolitics and Trade: "Has the US already lost to China? Trump's policies and the shifting global order" (Dec 8, 2025). "The Great Sanctions Hack: Why economic sanctions don't work the way we expect" (Nov 23, 2025) — Based on former RBI Governor Urjit Patel's new book. "ExplainSpeaking: How Trump's tariffs have run into an affordability crisis" (Nov 20, 2025). Domestic Policy and Data: "GDP: New labour codes and opportunity for India's weakest states" (Nov 28, 2025). "ExplainSpeaking | Piyush Goyal says India will be a $30 trillion economy in 25 years: Decoding the projections" (Oct 30, 2025) — A critical look at the feasibility of high-growth targets. "GDP: Examining latest GST collections, and where different states stand" (Nov 7, 2025). International Economic Comparisons: "GDP: What ails Germany, world's third-largest economy, and how it could grow" (Nov 14, 2025). "On the loss of Europe's competitive edge" (Oct 17, 2025). Signature Style Udit Misra is known his calm, data-driven, explanation-first economics journalism. He avoids ideological posturing, and writes with the aim of raising the standard of public discourse by providing readers with clarity and understanding of the ground realities. You can follow him on X (formerly Twitter) at @ieuditmisra ... Read More © The Indian Express Pvt Ltd