“This is the first time we’ve had two energy shocks at the same time,” said World Bank chief economist Indermit Gil, referring to the impact on oil and gas prices of the wars in Ukraine and the Middle East.
इजराइल-हमास युद्ध के चलते खाद्य पदार्थों, ईंधन के दाम बढ़ने का खतरा
Israel’s escalating military action in Gaza is likely to escalate into a regional conflict. If this happens, the outlook for the global economy could deteriorate, leading to a decline in growth and the risk of another rise in energy and food prices.
Rich and poor countries were beginning to regain their breath after a three-year economic shock caused by the COVID-19 pandemic and the Ukraine-Russia war, The New York Times reported. Stinging inflation is subsiding, oil prices have stabilized and the predicted recession has been avoided. But some major international financial institutions and private investors have warned that the fragile recovery could deteriorate.
“This is the first time we’ve had two energy shocks at the same time,” said World Bank chief economist Indermit Gil, referring to the impact on oil and gas prices of the wars in Ukraine and the Middle East.
According to the report, rising prices have not only reduced the purchasing power of households and companies, but also increased the cost of food production, leading to increased levels of food insecurity, especially in developing countries like Egypt, Pakistan and Sri Lanka. . ,
As it is, the nation is already struggling with unusually high levels of debt, weak private investment and the slowest recovery in trade in five decades, making it difficult for them to find a way out of the crisis.
The report said high interest rates are a result of the central bank’s efforts to curb inflation, making it difficult for governments and private companies to access credit and avoid default.
“All of these things are happening at the same time. We are in one of the most critical periods for the world economy,” Gill said.
Gill’s assessment matches that of other analysts. JPMorgan Chase Chief Executive Jamie Dimon said last month that “this could be the most dangerous time the world has seen in decades”, and described the conflict in Gaza as “the biggest and most important thing for the Western world.”
Gregory Daco, chief economist at EY-Parthenon, said that in a worst-case scenario, in which the war expands, oil prices could rise to $150 a barrel from about $85 currently.
“The global economic consequences of this scenario are grave,” he warned. He cited a mild recession, falling stock prices and a loss of $2 trillion to the global economy.
The prevailing environment now is one of uncertainty, which is impacting investment decisions and may discourage businesses from expanding into emerging markets, The New York Times reports. Borrowing costs have soared and companies in many countries from Brazil to China fear they will have trouble restructuring their debt.
Also, according to Oxford Economics, a consulting firm, emerging markets such as Egypt, Nigeria and Hungary have suffered the most from the pandemic, resulting in lower-than-expected growth.
Israel has seen a shortage of workers across all sectors, including construction, tech, agriculture and textiles, since the Hamas attack on October 7, Le Monde reports.
On Tel Aviv’s waterfront, construction of the luxury Mandarin Oriental hotel is stalled. The cranes and scaffolding are deserted. Nearly 80 percent of all projects under construction in Israel are on hold, the report said.
There has been a decline in consumer activity in a society hurt by Hamas-led terrorist attacks. One-third of restaurants in major cities have not reopened due to a lack of staff and sometimes customers.
Now thousands of volunteers are coming from towns in the rural areas to meet the labor shortage to pluck seasonal fruits. WhatsApp groups have formed to send volunteers to hospitals and supermarkets, but it’s hard to say how long this surge of solidarity will last, Le Monde reports.
On top of this, the high-tech companies of which the country is so proud have seen a 10-15 per cent reduction in their workforce of “geeks” and skilled executives, with about three lakh 60 thousand of the working population mobilized by the Reserve Army, Which is equal to 10 percent.
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