World economic experts have considered 3 scenarios for the development of the war with Hamas

israelinfo:  Economic experts around the world are anxiously looking towards the Middle East and fear that the war could lead the world economy into recession. According to a Bloomberg report, experts predict 3 scenarios that assess the future of the world economy depending on developments in the Middle East region.

The first scenario is the least traumatic for the economy. Economists took as a basis the situation of 2014, when the abduction and murder of three Israelis by Hamas was followed by a ground operation in the Gaza Strip. The clashes did not spread beyond the Palestinian territories, and their impact on oil prices and the global economy was weak.

If America imposes sanctions against Iran without Tehran's official entry into the war, world markets will witness an increase in oil prices by $ 3-4, and the impact on the world economy in this scenario will be minimal, especially if other OPEC countries compensate for the lost Iranian barrels due to their spare capacity.

The second scenario considers the spread of hostilities to Lebanon and Syria. This will increase the likelihood of a direct conflict between Israel and Iran, and the economic costs will increase, which will probably lead to an increase in oil prices by at least 10%. 

The global economic impact in this scenario is due to two shocks: a 10% jump in oil prices and the impact of financial markets coinciding with risks similar to what happened during the "Arab Spring", since the report does not exclude that in the event of an escalation of the war, the world will witness protests similar to the "Arab Spring".

This scenario assumes a decrease in the growth rate of the world economy next year by 0.3%, or about $ 300 billion, which will slow down the pace of economic growth to 2.4%. Higher oil prices will also add about 0.2% to global inflation.

The third scenario, the most difficult, is a direct conflict between Iran and Israel. According to world economists, it is unlikely, but it still cannot be ruled out. Such a development of the situation may cause a global recession. Higher oil prices and a reduction in risky assets will deal a severe blow to global economic growth, which could mean higher inflation.

In this case, an abrupt increase in oil prices to $ 150 per barrel is predicted. OPEC countries, including Saudi Arabia and the UAE, probably will not be able to save the situation, especially if Iran decides to close the Strait of Hormuz, through which a fifth of the world's daily oil supplies pass. The growth rate of the global economy will decrease to 1.7% in 2024.

An oil shock of this magnitude will disrupt global efforts to curb prices, resulting in global inflation of 6.7% next year. In the US, the Federal Reserve's 2% rate target will remain unattainable, and expensive gasoline will minimize the chances of Joe Biden's re-election for a second term.