The world economy faces a period of uncertainty due to tensions between countries of Middle East as IsraelLebanon, Gaza and Iran just under a year after the war broke out between Tel Aviv and the Palestinian militia of Hamas.
What consequences have the wars in the Middle East had so far?
A little beyond the immediate region, with the main effects limited to the financial markets while investors hedge their portfolios with safe-haven assets, the dollar has benefited since Iran’s ballistic missile attack on Israel.
Oil prices rose about 2 percent on Thursday amid concerns that a broader conflict could disrupt crude oil flows of the region, for example, if Israel decided to attack Iranian oil infrastructure, which in turn could trigger retaliation by Iran.
But it is not clear that this will translate into the kind of sustained and more defined increases that motorists they begin to notice in the fuel pump.
Analysts point out that USA has large crude oil reserves, while the oil-producing countries OPEC They have enough spare capacity to soften the impact of shocks, at least in the short term.
How do those responsible for economic policy react?
As always, the bankers centers insist that their job is to look beyond the unpredictable disturbances and specific trends in the economy and focus on deeper underlying trends. But neither can they afford to completely ignore the geopolitical events.
The governor of Bank of EnglandAndrew Bailey told the newspaper Guardian that the bank could act more aggressively to cut the interest rates If inflationary pressures they continue to weakensuggesting that central bankers for now do not see the conflict of Middle East as a major threat to its attempts to moderate inflation.
Bailey said there seemed to be a commitment to keeping the oil marketsbut also stated that the conflict could still drive up crude oil prices if things continue to escalate.
The deputy governor of the Swedish Riksbank, Per Janssonconveyed a similar message, stating that the effects of conflict of Middle East were not yet sufficient to justify a revision of the economic forecasts.
When will the impact become more evident?
The economic repercussions of a total war that would lead to broader attacks on Middle East energy infrastructure and Gulf regionsas well as further disruptions to trade routes across the Red Sea, would be more tangible.
Oxford Economics calculates that such a scenario would trigger the oil price up to 130 dollars and would subtract 0.4 percentage points from the growth of world production next year, which the International Monetary Fund currently considered around 3.3 percent.
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