Energy
Monday, October 30th, 2023 2:12 pm EDT
Key Points
- Ngozi Okonjo-Iweala, the Director-General of the World Trade Organization (WTO), warned that the ongoing Israel-Hamas conflict could have global economic repercussions if it spreads to the wider Middle East region. She emphasized that the Middle East is a significant source of the world’s energy, particularly natural gas and oil, which are crucial for the global economy. Any escalation in the region could disrupt global growth and trade.
- The Director-General expressed hope for de-escalation and peace and urged that the conflict does not extend beyond its current boundaries.
- Economists have cautioned that an escalation of the Israel-Hamas conflict could disrupt the global economy, potentially leading to increased energy prices and disruptions in key trade routes. The global trade growth forecast for 2023 is already grim due to falling aggregate demand, and the WTO had reduced its trade growth estimates for 2023. Global merchandise trade volume is now projected to grow by only 0.8% in 2023, a significant reduction from earlier estimates. Various factors, including challenges in China’s rebound, a real estate crisis in China, slower European Union growth, and issues related to aggregate demand and inflation, contribute to the uncertain economic outlook.
The article discusses how the ongoing Israel-Hamas conflict has the potential to impact global growth if it spreads to the wider Middle East region. Ngozi Okonjo-Iweala, the Director-General of the World Trade Organization (WTO), expressed concern in an interview with CNBC. She pointed out that the Middle East is a significant source of the world’s energy, including natural gas and oil, and any escalation in the region could disrupt global growth and trade.
The Director-General emphasized the importance of de-escalation and peace in the region and expressed hope that the situation does not worsen. She acknowledged that global trade growth is already facing challenges due to falling aggregate demand and a slowdown in global manufacturing. The WTO had previously reduced its trade growth forecast for 2023, and global merchandise trade volume is now expected to grow by only 0.8% in 2023, lower than earlier estimates.
Several factors contribute to this grim outlook, including a less robust rebound in China after the pandemic, a real estate crisis in China, slower European Union growth, and issues related to aggregate demand and persistent inflation in many regions. Okonjo-Iweala also noted that interest rates have been rising.
For the full original article on CNBC, please click here: https://www.cnbc.com/2023/10/30/wto-chief-warns-israel-hamas-war-could-hurt-global-growth.html
