Guardian: Military Tensions with Iran Undermine Global Economic Growth Prospects
The Guardian reported that rising military tensions among the United States, Israel, and Iran, alongside increasing oil and gas prices, have diminished hopes for a global economic recovery. According to the newspaper, economists warn that if the conflict continues, previous forecasts for economic growth will become unattainable.
The report states that Kristalina Georgieva, Managing Director of the International Monetary Fund, has announced that a 10 percent increase in energy prices could raise global inflation by 40 basis points and reduce global economic growth by between 0.1 and 0.2 percent. These remarks come as energy markets experience volatility following recent developments.
Lord Jim O’Neill, an economist at Goldman Sachs, also said that the White House has not given sufficient attention to the geopolitical dimensions of the conflict with Iran. In his view, the consequences of these tensions extend beyond the military arena, also affecting the global economy.
Bloomberg Economics estimates that every one-percent decrease in oil supply could result in about a four-percent increase in the price of the commodity. Meanwhile, Oxford Economics has predicted that year-end inflation in the UK and the Eurozone will be approximately 0.5 to 0.6 percentage points higher than earlier estimates.
The Guardian added that following a 17 percent rise in Brent crude oil prices and higher gasoline prices, American citizens are now directly experiencing the economic impacts of these tensions—a development that could affect household living conditions and economic policies.
