Ongoing tensions in the Middle East are putting recent progress made in addressing global inflation at risk, according to a warning from the World Bank. The Israeli military campaign in Gaza has led to increased tensions in the region and higher oil prices, which is driving up commodity prices, particularly for oil and gold.
More than 200 days after the conflict in Gaza, regional tensions are still high. The Chief Economist and First Vice President of the World Bank Group, Indermeet Gill, stated that while there had been a decline in commodity prices that contributed to lower inflation over the past two years, this trend has now stalled. He expressed concern that a major energy shock caused by the conflict could reverse progress made in reducing inflation. If there were significant disruptions to oil supply, the price of Brent crude could rise to $92 or even $100, leading to a one percentage point increase in global inflation.
In addition to impacting inflation, the conflict in the Middle East could delay interest rate cuts and exacerbate food insecurity, which has already been on the rise due to armed conflicts and high food prices. The World Bank emphasized
