EVEN AS THE WORLD was making peace with the Russia-Ukraine conflict, and the global economy showing signs of recovery, the Israel-Hamas war has opened up new worries. The Ukraine war has resulted in a sharp rise in crude oil and commodity prices, further slowing the growth of the world economy.
The International Monetary Fund’s (IMF) World Economic Outlook Update, that released recently, says forces, including the long-term consequences of the Covid-19 pandemic, the war in Ukraine, and increasing geo-economic fragmentation are holding back the recovery. It predicts the global economy to grow at 3 per cent in 2023, which could slow to 2.9 per cent in 2024.
The economic repercussions of the Israel-Hamas war are still playing out, but India is unlikely to go unscathed. “The overall global economic conditions remain a concern. The world cannot manage two wars at once,” says N.R. Bhanumurthy, Vice Chancellor of Dr. B.R. Ambedkar School of Economics University, Bengaluru, adding that any worsening of global economic conditions would impact the Indian economy.
For India, which has already been dealing with inflation, the Israel-Hamas war has brought fresh concerns. Finance Minister Nirmala Sitharaman, during her recent visit to Morroco to attend the IMF-World Bank Annual Meeting and G20 Finance Ministers and Central Bank Governors meeting, highlighted that the Middle Eastern crisis, fuel prices and fragmentation of global supply chains remain major concerns for emerging markets.
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