IMF Warns of Broad Global Impact Due to Conflict in the Middle East from mercy chinwo my confidence Watch Video

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✓ Published: 17-Apr-2024

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IMF Warns of Broad Global Impact, Due to Conflict in the Middle East.<br/>According to 'The Guardian,' the International Monetary <br/>Fund recently highlighted the risks of escalating <br/>conflict in the Middle East with two new reports. .<br/>The reports, titled World Economic Outlook (WEO) and the Global Financial Stability Review (GFSR), comes amid heightened fears of a war between Iran and Israel.<br/>The IMF reports that the escalating conflict comes at a time when financial markets have remained optimistic of a soft landing for the global economy.<br/>The IMF reports that the escalating conflict comes at a time when financial markets have remained optimistic of a soft landing for the global economy.<br/>That soft landing, which would include lowering inflation, receding interest rates and would avoid a potential recession, could be threatened by the outbreak of war.<br/>That soft landing, which would include lowering inflation, receding interest rates and would avoid a potential recession, could be threatened by the outbreak of war.<br/>'The Guardian' reports that previous Middle East conflicts have resulted in significantly higher oil prices. .<br/>Pierre-Olivier Gourinchas, the IMF’s economic <br/>counsellor, said the organization was evaluating the <br/>potential for another commodity shock from the conflict.<br/>The increased inflation that would <br/>come from higher energy prices would <br/>trigger a response from central banks that <br/>would tighten interest rates in order to <br/>secure inflation coming back to target, <br/>and that would weigh down on activity, Pierre-Olivier Gourinchas, IMF economic counsellor, via 'The Guardian'.<br/>The increased inflation that would <br/>come from higher energy prices would <br/>trigger a response from central banks that <br/>would tighten interest rates in order to <br/>secure inflation coming back to target, <br/>and that would weigh down on activity, Pierre-Olivier Gourinchas, IMF economic counsellor, via 'The Guardian'.<br/>It would do so in a context in which, <br/>in some countries, activity and growth <br/>is already fairly weak, so that might <br/>also have a strong effect there, Pierre-Olivier Gourinchas, IMF economic counsellor, via 'The Guardian'.<br/>According to Gourinchas, the impact of a 15% increase <br/>in the price of oil, combined with higher shipping costs, <br/>could result in a 0.7% increase in global inflation.<br/>According to Gourinchas, the impact of a 15% increase <br/>in the price of oil, combined with higher shipping costs, <br/>could result in a 0.7% increase in global inflation.<br/>Gourinchas also warned that such <br/>an increase would also bring down <br/>business confidence and global investment.