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Experts are raising concerns about the increasing conflict in the Middle East, warning of its potential impact on global economic growth and inflation. This concern comes at a time when the aftermath of Hurricane Helene is being dealt with in the US and China is seeking to stabilize its economy. The escalating regional conflict has been linked to Israel’s retaliation against Iran over missile attacks, further intensifying tensions in the Middle East.
Ahmet Kaya, a principal economist at the UK’s National Institute of Economic and Social Research, highlighted that ongoing uncertainties like delayed interest-rate hikes, reduced trade activities, as well as uncertainty around the upcoming US election had already put pressure on the global economy. He emphasized that this war in the Middle East could exacerbate these instabilities further.
The risk of an increase in inflation due to disruptions in international supply chains and energy costs rising was also brought up by Kaya. If oil prices were to rise by $10 per barrel or shipping costs increased by 10%, it could potentially lead to an increase in inflation rates for advanced economies.
What are the potential implications of the escalating conflicts in Syria, Yemen, and Libya on the global economy?
Middle East Turmoil: A Growing Threat to the Global Economy, Warns Panel of Experts
A panel of renowned experts recently convened to discuss the escalating turmoil in the Middle East and its potential impact on the global economy. The consensus among the panelists was that the unrest in the region poses an increasingly significant threat to the stability and growth of the world economy. As tensions continue to escalate and geopolitical uncertainties grow, it is becoming increasingly crucial for policymakers, businesses, and investors to be cognizant of the potential risks and take proactive measures to mitigate the impact of the growing instability.
The Middle East has long been an area of geopolitical and economic significance, given its vast oil reserves, strategic location, and complex web of political and religious dynamics. The region’s stability has a direct impact on global energy prices, trade routes, and financial markets. Any disruption to the flow of oil and natural gas from the Middle East can have profound implications for the global economy. The recent escalation of conflicts in countries such as Syria, Yemen, and Libya, as well as ongoing tensions between Iran and Saudi Arabia, has raised concerns about the potential for further destabilization in the region.
Key Factors Driving Middle East Turmoil
To understand the implications of the Middle East turmoil on the global economy, it is essential to examine the factors driving the unrest in the region. The panel of experts highlighted several key factors contributing to the escalation of tensions in the Middle East, including:
Geopolitical rivalries: The Middle East is a hotbed of geopolitical rivalries, with major powers such as the United States, Russia, China, and European countries vying for influence in the region. The competition for control over energy resources, military bases, and strategic alliances has contributed to the proliferation of conflicts and proxy wars in the region.Sectarian tensions: The Middle East is characterized by deep-seated sectarian divisions, with Sunni and Shia Muslims at odds with each other. These religious divides have fueled internal conflicts in countries such as Iraq, Syria, and Lebanon, as well as regional competition between Saudi Arabia and Iran.Economic challenges: Many countries in the Middle East are grappling with economic challenges, including high unemployment, inflation, and fiscal deficits. The impact of the COVID-19 pandemic has further exacerbated economic difficulties in the region, leading to social unrest and political instability.
Implications for the Global Economy
The growing turmoil in the Middle East has far-reaching implications for the global economy. The panel of experts warned that continued instability in the region could lead to the following consequences:
In Israel specifically, economists have expressed concerns about dampened investor confidence amidst ongoing conflict which affects overall economic growth. Attention has been drawn to urgent improvements needed regarding social and economic policies there so that they can better manage rising inflation without causing harm to their economy.
Looking at it from a different perspective – In contrast with Israel’s situation – experts like Oliver Allen from Pantheon Macroeconomics see less concern for similar impacts within United States as they are net energy exporters with reduced reliance on oil imports. Hurricane Helene may cause short-term disruptions but would likely have only a minimal impact on fourth-quarter GDP according to Oxford Economics report.
Lastly, attention is turned towards China where Duncan Wrigley expressed that while their recently unveiled economic stimulus package would bolster short-term growth, it might not fully address deeper issues such as high youth unemployment or challenges within their property market leading Beijing aim for more comprehensive support measures next year.
The post Middle East Turmoil: A Growing Threat to the Global Economy, Warns Panel of Experts first appeared on Today News Gazette.
Author : Jean-Pierre CHALLOT
Publish date : 2024-10-04 09:32:04
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