World Bank Chief Warns Middle East War Hits Global Growth
Ajay Banga warns the Middle East war could reduce global growth by one percentage point. Inflation may rise even if the current fragile ceasefire holds firm.
World Bank President Ajay Banga has warned that the conflict in the Middle East will have a cascading impact on the global economy, even if a fragile ceasefire brokered by the United States remains in place. Banga noted that the economic damage could become significantly more profound if the current truce fails and the situation escalates further.
According to World Bank analysis, global growth could be reduced by 0.3 to 0.4 percentage points in a baseline scenario where the war ends early. However, a prolonged conflict could see growth slashed by as much as 1 percentage point. Inflation is projected to rise by 200 to 300 basis points, with a potential impact of up to 0.9 percentage points if hostilities continue.
