World Bank Economist Warns Iran War Crisis Surpasses Ukraine Conflict
World Bank Chief Economist Indermit Gill warns that the economic consequences of the war against Iran are more severe than the Ukraine crisis and previous oil shocks. In an interview, Gill outlines scenarios where global growth could plummet to 1.7 percent while inflation rises to 4.7 percent, driven by disrupted supplies of crude oil, gas, and fertilizers. He highlights critical second-round effects, including rising interest rates and food prices, which threaten to exacerbate global hunger as farmers reduce fertilizer use or switch crops. Unlike previous crises, high government debt levels limit fiscal responses, particularly for economies outside the US, China, and India. Gill attributes stalled progress in poverty reduction to increased protectionism and trade barriers imposed by G-20 nations over the last decade. He argues that rich countries' hostility toward free trade, through tariffs and import bans, hinders global economic stability and recovery. The analysis suggests that without addressing these structural trade issues and managing supply chain disruptions, the global economy faces a heightened risk of recession, with developing nations bearing the brunt of the impact.
Wire timeline
World Bank Economist Warns Iran War Crisis Surpasses Ukraine Conflict
World Bank Chief Economist Indermit Gill warns that the economic consequences of the war against Iran are more severe than the Ukraine crisis and previous oil shocks. In an interview, Gill outlines scenarios where global growth could plummet to 1.7 percent while inflation rises to 4.7 percent, driven by disrupted supplies of crude oil, gas, and fertilizers. He highlights critical second-round effects, including rising interest rates and food prices, which threaten to exacerbate global hunger as farmers reduce fertilizer use or switch crops. Unlike previous crises, high government debt levels limit fiscal responses, particularly for economies outside the US, China, and India. Gill attributes stalled progress in poverty reduction to increased protectionism and trade barriers imposed by G-20 nations over the last decade. He argues that rich countries' hostility toward free trade, through tariffs and import bans, hinders global economic stability and recovery. The analysis suggests that without addressing these structural trade issues and managing supply chain disruptions, the global economy faces a heightened risk of recession, with developing nations bearing the brunt of the impact.
Aktuell - FAZ.NET