11/29/2023–|Last updated: 11/29/202308:04 PM (Mecca time)
The Organization for Economic Cooperation and Development warned that the escalation of the conflict between the Islamic Resistance Movement (Hamas) and Israel in the Gaza Strip may undermine the global economy, and said, “If the conflict worsens and extends to the entire region, the risks of slowing growth and increasing inflation will be much greater than they are now.” She considered that the effects of the war on Gaza are still “relatively limited” on the global economy so far.
The organization pointed out that if the war in the Middle East intensifies and expands, its impact on the global economy may be mainly through oil and gas prices. She indicated that a rise in the price of a barrel by $10 may lead to an increase in global inflation by 0.2 points in the first year and a decrease in growth by 0.1 points.
She added that trade may be greatly affected due to the presence of two international trade routes in the conflict zone, namely the Strait of Hormuz and the Suez Canal.
The Paris-based organization reduced its global growth forecast this year by 0.1 point to 2.9%, while keeping next year’s forecast unchanged at a growth level of 2.7%.
The organization’s chief economist, Claire Lombardelli, explained – in a report – that the obstacles holding back the economy are not caused by the Middle East, and that “tight financial conditions, weak trade, and low confidence all have grave consequences.”
On the other hand, inflation, which is still high, is expected to gradually decline to 5.3% next year in the OPEC member states, compared to 7.4% this year.
In the Eurozone, inflation is expected to reach 2.9% in 2024, compared to 5.5% this year, and to 2.8% in the United States, compared to 3.9% in 2023.
Lombardelli pointed out that “the pace of growth is uneven,” as the United States is expected to record growth of 2.4% this year and 1.5% next year, while the growth rate in the Eurozone will be 0.6% this year and 0.9% next year.
On the other hand, the growth rate in China may reach 5.2% this year and 4.7% next year, an increase of 0.1 points compared to expectations last September, while the United Kingdom is expected to record growth of 0.5% in 2023 and 0.7% in the year. 2024.
Previous warnings
A few days ago, the Executive Director of the International Energy Agency, Fatih Birol, warned – during an energy conference in Norway – saying: “The oil market is witnessing a state of tension due to the current crisis in the Middle East.”
He added that the war in Gaza between the Palestinian resistance – led by Hamas – and Israel has not significantly affected market prices at the present time.
But he explained, “If one or more oil-producing countries in the region are directly involved in the conflict, we may see repercussions from that.”
Last month, international economic and financial officials warned of the negative effects and huge losses on the global economy as a result of the Israeli aggression on the Gaza Strip, and expressed their fear of incurring huge losses if the conflict expands and continues for a longer period.
The following infographic reviews the statements of prominent international figures who warned of the economic repercussions of the conflict in the Middle East.
