- 1 The ongoing war between Israel and Hamas is potent enough to trigger a global recession.
- 2 Oil prices are expected to soar to $150 a barrel and global growth is assumed to decline to 1.7%, as per Bloomberg’s economist.
Reviewing history, war-like situations always result in economic recessions and crises. Rising inflation, enhanced food insecurities, extreme poverty, and worsening environmental degradation directly result in an economic downturn. Addressing the current situation, the ongoing war between Israel and Hamas is expected to trigger global recessions, affecting global growth. The prediction is made by Bloomberg Economists.
What Bloomberg’s Report Actually Said
Bloomberg, a business accountable for delivering market data, news, analysis, and stories from the business world, came up with a new analysis. The analysis was related to the ongoing Middle East Conflict and the global economy. Three seasoned economists including Ziad Daoud, Bloomberg’s global economist, and Chief markets economist, made an economic prediction.
According to the report, the side effects of the ongoing battle between Israel and Hamas can be experienced in the global economy. The war is potent enough to cause an economic recession, leading to a financial crisis on a global level.
The continuation of the war also booms the chances of derailing the global economy. Bloomberg’s economist warned nations about the upcoming challenge, stating it as a “real risk”. The war began on October 7, 2023, killing more than 1,400 people and seizing around 203 hostages during the rampage. Based on the overall examination, the war can create a scenario where a more intense escalation could pull Iran and Israel into direct confrontation.
The major impact of the same is expected to reflect on oil prices and global growth.
“The oil prices are predicted to rise up to $150 whereas the global growth is assumed to decline by 1.7%, resulting in an economic recession of approximately $1 Trillion”, said the economist.
Spotting the previous years, the world economy was affected by the Russia-Ukraine war. “The global economy is not in the situation to handle another economic recession or financial crisis as of now”, said Bloomberg’s economists. The war is in an energy-rich region and is capable enough to reignite inflation. The ongoing war is also going to affect the US presidential election which is going to be held next year. It is expected that voter sentiment will be affected by the gasoline prices.
The influence of the war on global growth and inflation is analyzed under three scenarios. Hostility largely to Israel and Gaza, conflict spilling over to neighboring nations like Syria and Lebanon, and direct war between Israel and Iran are the three scenarios. The war is also assumed to influence the cryptocurrency market. “Data from cryptocurrency-focused channels on the Google-owned microblogging platform YouTube can be used to time the cryptocurrency market, with an enhanced user base for popular channels marketing Bitcoin (BTC) price tops” according to CryptoGlobe report. The channels can be used as a sentiment indicator to showcase how retailers are engaging with the cryptocurrency marketplace.
Bloomberg’s economists made a prediction based on the current war situation between Israel and Hamas. The major impact of the situation is expected to be seen on global growth and a rise in oil prices, increasing the chances of economic recession.
Nancy J. Allen is a crypto enthusiast, with a major in macroeconomics and minor in business statistics. She believes that cryptocurrencies inspire people to be their own banks, and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning. She frequently researches, and posts content on the top altcoins, their theoretical working principles and technical price predictions.