The rise of conflict in the Middle East threatens to undermine the gains of this year, as there are risks of an increase in oil prices and a lack of confidence. As the fight in Israel and Gaza escalates into a wider regional conflict, it can not only hit the confidence in the economy but can also lead to an outburst of inflation in the world economy.
After the shocks of COVID-19 and the war in Ukraine, a new threat emerged for the global economy as the conflict in the Middle East looms large. Financial experts, ministers, and officials have warned about the upcoming impact.
According to the Financial Times,
“Broader regional tensions would have significant economic ramifications, they said, as they rounded off meetings of the IMF and World Bank in Morocco this week. The biannual events took place as Israel declared war on Hamas and launched a major bombardment of the Gaza Strip.”
Many experts and financial ministers have warned that if there is an escalation in the conflict in the Middle East, there can be big consequences for the economy. The risks associated with the conflict range from high prices for energy leading to inflation to a lack of confidence among the masses.
Jamie Dimon, the CEO of JP Morgan, commented that this is
“the most dangerous time the world has seen in decades.” Various experts and officials have expressed their relief that Central Banks around the world have been able to control the rise of inflation while keeping recession at bay.
The IMF also warned in April of a possible negative impact on the global economy which can lead to a “hard landing.”
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