IMF: War between Israel, Hamas could Lead to Inflation, Global Growth Slowdown

The second official at the International Monetary Fund (IMF) said that the war between Israel and Hamas could lead to more inflation and difficulty in global growth if it turns into a broader conflict that causes a significant increase in oil prices.

Gita Gopinath, First Deputy Director General of the Fund, confirmed in an interview with Bloomberg TV that the models prepared by the organization, whose mandate includes monitoring the global economy, show that a 10% increase in oil prices leads to a rise in inflation by 0.4 percentage points after a year and under In this scenario, global output would fall by 0.15 percentage points and this would add to an already difficult inflation and growth environment that poses a challenge to central banks.

She added that it is a bit early to know the full effects of the conflict, and a lot will depend on whether it attracts other countries. “If it turns into a broader conflict, and this leads to higher oil prices, it will have an impact on economies. And this is usually one of the “The channels through which we see this impacting global numbers.”

Gopinath said that Middle Eastern countries are likely to be most directly affected, but the impact of rising energy prices could become widespread.