- The warning underscores growing concerns among global policymakers that continued instability in the region could derail economic recovery and fuel further volatility in international markets.
The ongoing conflict in the Middle East is expected to send shockwaves through the global economy, even if a fragile ceasefire holds, according to World Bank chief Ajay Banga.
In an interview with Reuters, the World Bank president warned that the economic impact of the war would be significant, adding that the consequences would intensify sharply should the ceasefire collapse and hostilities escalate further, reports Al-Rai daily.
Banga noted that under a baseline scenario in which the conflict ends relatively soon, global economic growth could decline by three to four percentage points. However, if the war continues, the slowdown could deepen further, while inflationary pressures would rise markedly.
He estimated that inflation could increase by 200 to 300 basis points in the near term, with a more severe and prolonged conflict potentially pushing the impact even higher, alongside a broader drag on global output.
The war, which has already claimed thousands of lives across the region, has disrupted key global supply chains. Oil prices have surged by approximately 50 percent, affecting not only energy markets but also the supply of gas, fertilizers and helium, while simultaneously dealing a blow to tourism and the aviation sector.
The warning underscores growing concerns among global policymakers that continued instability in the region could derail economic recovery and fuel further volatility in international markets.
