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flag Oil price surge from Iran conflict boosts budgets, but economists warn against inflation-prone stimulus, urging long-term fiscal reforms instead.

flag Rising oil prices due to the Iran conflict have created unexpected budget surpluses, but economists warn against using the windfall for short-term cost-of-living measures like fuel excise cuts or energy rebates, as such actions could worsen inflation. flag HSBC’s chief economist, Paul Bloxham, cautioned that repeating post-COVID-19 stimulus strategies—where temporary spending fueled inflation—would undermine economic stability. flag Instead, he urged policymakers to prioritize long-term fiscal responsibility through tax reform and spending cuts to ensure sustainable growth amid global energy volatility.

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