The escalation of the Israeli-Palestinian conflict poses a serious threat to the global economy. The publication reports that Business Content Citing the words of Greg Daco, chief economist of the consulting firm Ernst & Young (EY).
The expert identified two options for resolving the conflict. In the worst-case “uncontrollable” scenario, oil prices could rise by $50 to reach $150 by the end of 2023. In this case, the VIX volatility index may increase by at least 18 points.
Daco warned that such a shock would cause serious damage to the global economy. Global GDP could decline by 1.4% by the end of 2024, and the value of the global economy could fall by nearly $2 trillion.
According to the expert, the biggest blow will fall on central banks, which will have to react to the increase in inflation but will no longer be able to reduce interest rates completely to zero as before. Inflation is expected to increase by 1.5 percentage points by 2024.
EY also points out less serious scenarios. So in the best-case scenario, oil prices will rise by just $7, then fall to $3, and volatility will increase by 4 basis points over the next six months.
Russian Deputy Prime Minister Alexander Novak in mid-October suggestedIt is predicted that the oil price will be around $100 per barrel in 2035.
Previously expert guess Due to the escalation of conflicts in the Middle East, oil prices increased by 400 dollars.