And sent Israel its forces to South Lebanon After heavy air strikes over a period of two weeks, which led to an escalation of the conflict in the Middle East. Hamas has also been fighting in the Gaza Strip for nearly a year.
Below are the possible repercussions of the conflict on the global economy in the coming weeks.
What repercussions have occurred so far?
The consequences outside the Middle East are limited to the financial markets where he resorts Investors To safe haven investments. The dollar benefited from the Iranian missile attack on Israel, with the US currency index, which measures its performance against the euro, the yen and four other major currencies, trading near its highest levels in three weeks.
And it rose Oil prices By about five percent on Thursday, amid fears that the broader conflict may disrupt crude flows from the region, if, for example, Israel decides to target oil infrastructure in Iran Which in turn may entail an Iranian response.
But this is unlikely to translate into higher prices Petroleum products Provided to consumers. Analysts point out that the United States has high levels of crude oil inventories while OPEC producing countries have enough spare capacity to mitigate the impact of the turmoil, at least in the short term.
What do policy makers do?
Governors confirm Central banks Usually their role is to look beyond unexpected shocks to the economy and focus instead on deeper, fundamental trends. However, they cannot completely ignore geopolitical events.
Governor said Bank of England Andrew Bailey for The Guardian The bank may move faster to cut interest rates if inflationary pressures continue to ease, suggesting that central bankers currently do not see the conflict in the Middle East as a major threat to their attempts to rein in inflation.
Bailey said there appeared to be a commitment to maintaining stability in oil markets, but he also said the conflict could push oil prices higher if escalation continues.
The deputy governor made Riksbank Per Jansson made similar comments, saying that the repercussions of the conflict in the Middle East are not yet influential enough to modify economic expectations.
The International Monetary Fund said Thursday that the escalation of the conflict in the Middle East could have major economic consequences for the region and the global economy, but commodity prices remain below their highest levels last year.
The spokeswoman said International Monetary Fund Julie Kozak It is too early to predict specific impacts on the global economy.
When will the repercussions become clearer?
The price of crude oil futures contracts Brent It is currently near $80 per barrel, which is lower than the level of $84 it reached at the time of the attack launched by Hamas on October 7 on Israel almost a year ago, and much lower than its highest levels of $130 after the Russian war against Ukraine in February 2022.
It is expected to be affected Europe Oil prices are high because, unlike the United States, it does not have significant domestic crude production.
But European policymakers estimate that a 10 percent rise in oil prices would raise inflation by only 0.1 percentage point.
The economic repercussions will be clearer in the event of all-out war, which could lead to broader attacks on energy infrastructure throughout the Middle East and Gulf region, in addition to further disruptions to trade routes through the Red Sea.
Oxford Economics estimated that such a scenario would raise oil prices to $130 and reduce global GDP growth next year by about 0.4 percentage points, which the International Monetary Fund currently expects at 3.3 percent.
