Israel-Palestine conflict could impact fuel prices, world GDP says IMF

The International Monetary Fund (IMF) said that the ongoing Israel-Palestine conflict might impact the fuel prices and also the world GDP.

Gita Gopinath IMF said the Israel-Gaza war could have a major impact on the global economy, especially since it comes at a time when many countries around the world are fighting inflation.

Gopinath the First Deputy Managing Director of the IMF, said that if the war becomes a regional conflict and sees the involvement of more countries, it could have an impact on oil prices, leading to an increase in inflation. . Additionally, world GDP may also be affected.

"It's really heartbreaking to see what's happening there in terms of loss of civilian life. It's terrible. In terms of the economic consequences for the rest of the world, a lot depends on that," Gopinath said.

Geeta Gopinath said, “We estimate that if you have a 10% increase in oil prices, that reduces world GDP by 0.15 percentage points and increases inflation by 0.4 percentage points, and given that That many countries around the world are still trying to reduce inflation will increase their challenges."

Gopinath said that the war can also create migration related problems and tourism in the area can be affected. I think it's too early at this point to know what might happen. But we are monitoring the developments very closely. Returning to his earlier point, the senior IMF official said that the rise in oil prices and its impact on inflation will remain the main concerns in terms of the economic fallout of the war.

She said, "We are concerned about the volatility in fuel prices. We have seen that gas prices have increased significantly due to the damage of a particular gas pipeline in Europe. The bigger concern is that countries are fighting inflation. Aggregate inflation was coming down in many countries. If it rises again in an environment where there has been high inflation for some time, it could raise inflation expectations and make it harder for central banks to win the battle against rising prices.