French Economy Minister Bruno Le Maire warned Thursday that the most prominent risks to the economy currently are “geopolitical,” and will have “heavy” consequences on growth and energy prices in the world, especially if the conflict between Hamas and Israel expands.
Announcement
Le Maire announced to journalists on the sidelines of the annual meetings of the International Monetary Fund and the World Bank held in Marrakesh that “the most prominent economic risks have now become geopolitical risks.”
The minister touched on the ongoing conflict between Hamas and Israel, while recalling the effects of the Russian invasion of Ukraine, which was a major cause of increased inflation, as well as the conflict in Azerbaijan.
He said, “We currently have a third geopolitical risk, which is the risk of the conflict in Israel spreading to the region as a whole, and this risk is a fundamental risk to the global economy.”
He believed that the expansion of the conflict into the region “will have heavy economic consequences on energy prices and global growth.” He added that if this conflict remains confined, “the consequences on the price of oil will be limited, and they are limited today, as the price of a barrel has risen, but to a limited extent.”
After the price of oil rose by more than 5% on Monday, it has declined since Tuesday.
For its part, the International Energy Agency confirmed on Thursday that the conflict between Hamas and Israel “has not had a direct impact on oil flows” since its outbreak on Saturday, and that “expectations” regarding a potential threat to the flow of oil supply remain “currently limited.”
Kristalina Georgieva, Director General of the International Monetary Fund, considered Thursday that the attack on Israel is “a new cloud on an already not very bright horizon for the global economy.”
Bruno Le Maire, for his part, expressed his dissatisfaction with economic growth in Europe, while the International Monetary Fund expects a contraction, especially in Germany, by 0.5%.
The minister considered that “there is a lack of productivity and growth in Europe, and we cannot be satisfied with the level of growth in Europe, and we cannot remain behind the United States and China with an average growth of about 1%.”
He called for improving productivity with more innovation and investment in technology, combating climate change or artificial intelligence.
Additional sources • AFP
2023-10-12 18:48:25
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