The “Al-Aqsa Flood” operation is still casting a shadow on the fragile global economy, due to the Covid crises and the war in Ukraine, which has led many economists to warn of the repercussions, which may take some time to fully appear in global markets.
The chief economist of the International Monetary Fund, Pierre-Olivier Gurinchas, said during a joint meeting of the International Monetary Fund and the World Bank in Morocco this week that the global economy is moving at a faltering pace, and is not running quickly, before the war in the Middle East overshadows the annual meeting and its expectations.
Palestinian resistance fighters invaded the occupied territories around the Gaza Strip at the end of last week, and unleashed an unprecedented wave of organized attacks on villages near the Gaza border, in response to the repeated attacks on Al-Aqsa Mosque by settlers under the noses of the occupation police.
As the world watched these events closely, the price of oil jumped by as much as five dollars a barrel, futures markets fell and the shekel fell to its lowest level in seven years.
Since then, the market reaction has been relatively weak, but most experts believe this is because no one really knows what will happen over the coming days.
CBC quoted Paul Samson, head of the Center for International Governance Innovation in Waterloo, Ontario, as saying that anything that happens in the Middle East is always at risk of spreading. Occupation Prime Minister Benjamin Netanyahu said on Monday that Hamas had committed a mistake of historical proportions.
He said in a prepared statement that Hamas will pay a price that it and others will remember for decades to come, he claimed. Experts say that all of this increases the risk that the conflict may expand.
The famous Egyptian-American economist, Mohamed El-Erian, told CNBC that if matters expand and include other parties, this will affect the global economy and increase its weakness, and will increase inflationary pressures, and the markets will find it difficult to deal with the matter.
It currently appears that oil traders are watching along with the rest of the world with no certainty as to what will come next.
Rory Johnston, founder and publisher of the Commodity Context newsletter, says the conflict would entail a real risk, namely the possibility of attracting two of the region’s largest oil suppliers, Saudi Arabia and Iran.
Johnston said that everyone knows that Iran supports Hamas, but what we do not know is the extent of responsibility in the explicit planning and green light for this attack. Iran’s supreme authority, Ayatollah Ali Khamenei, denied any involvement, but described the attack as successful.
Meanwhile, Saudi Arabia was on the cusp of finalizing a historic peace and trade agreement with the occupation government. This came after the Occupation Foreign Ministry signed trade agreements with Bahrain and the United Arab Emirates in 2020.
Johnston says that the Saudi deal included increasing oil production, which would reduce the cost of gasoline for global consumers, but at the same time he says that it is not clear now what will happen when the Saudi deal adds another layer of complexity to the oil market’s reaction.
The price of oil is directly linked to the cost of living crisis throughout the Western world. If crude oil prices rise, that means consumers pay more at the pumps. “We were hoping inflation would come down,” said Mark Manger, a professor of political economy at the Munk School of Global Affairs and Public Policy.
Aside from the price of oil, he says bond prices have risen since the weekend, as investors look for safe havens such as US Treasuries and German Bunds. He adds that uncertainty and war greatly affect global trade as people quickly try to avoid risks.
Sampson says consumers, investors and policymakers alike need to prepare for one fact: whatever happens, it will take a long time to solve this problem.
He told CBC News that he cannot imagine that the situation will calm down within a year, but this does not mean that the conflict will continue, but its repercussions will remain for some time.
2023-10-11 21:03:32
#global #economy #AlAqsa #Flood
