Gaza conflict termed economic shock
A view of a destroyed neighborhood in Gaza following brutal Israeli airstrikes. PHOTO: Reuters
World Bank President Ajay Banga said on Tuesday that the Israel-Gaza conflict is an unnecessary global economic shock that will make it harder for central banks to achieve soft landings in many economies if it spreads.
“It’s a humanitarian tragedy and it’s an economic shock we don’t need,” Banga told Reuters on the sidelines of the World Bank-International Monetary Fund annual meetings in Morocco.
Central banks were “beginning to feel a little more confident that there was an opportunity for a soft landing, and this just makes it harder,” Banga said.
He said there was less immediate economic impact than at the start of Russia’s invasion of Ukraine last year because the Israel-Gaza conflict does not impact exports of oil, grains and fertilisers.
But it does transmit through financial markets, with dollar assets suddenly rising, he said.
Published in The Express Tribune, October 11th, 2023.
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