Business Standard/Bloomberg: Wider war in Middle East could tip the world economy into recession
The Hamas attack and Israel’s response are taking a heavy human toll. A global economic downturn may follow.
Like Middle East wars of the past, the conflict between Israel and Hamas that broke out this past week has the potential to disrupt the world economy — and even tip it into recession if more countries are drawn in.
That risk is real, as Israel’s army prepares to invade Gaza in response to an attack by the militant group. The death toll from the Hamas assault and the ongoing Israeli air strikes on Gaza is already in the thousands. There’s concern that militias in Lebanon and Syria that support Hamas will join the fighting.
A sharper escalation could bring Israel into direct conflict with Iran, a supplier of arms and money to Hamas, which the US and the European Union have designated a terrorist group. In that scenario, Bloomberg Economics estimates oil prices could soar to $150 a barrel and global growth drop to 1.7% — a recession that takes about $1 trillion off world output.
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Update #1: A bigger war in Israel would send oil prices skyrocketing and hurt the economy’s chances of avoiding a recession (Insider)
Update #2: Bloomberg estimates economic cost of Iran-Israel conflict (RT)
WNU Editor: I think the experts are under-estimating the global economic cost of a major Middle Eastern War. Middle Eastern oil production cutbacks alone will cause unbelievable harm to the global econom.