Comment on Wider Middle East conflict threatens the global economy — when the US and China already face headwinds, experts say

Wider Middle East conflict threatens the global economy — when the US and China already face headwinds, experts say

The widening Middle East conflict, Hurricane Helene, and China's woes all pose economic headwinds.Peter Zelei Images/Getty ImagesThe widening conflict in the Middle East threatens to crimp growth and stoke inflation, experts say.Hurricane Helene is a big short-term disruption but shouldn't hit quarterly GDP, they say.They don't expect Beijing's stimulus measures to address China's deeper problems.Experts say the escalating war in the Middle East could choke global economic growth and reignite inflation, just as the US is dealing with the aftermath of Hurricane Helene, and China is trying to stabilize its beleaguered economy.Shockwaves of warThe regional conflict has expanded, with Israel threatening retaliation against Iran for attacking it with missiles in response to the killing of Hamas and Hezbollah leaders.The escalation comes as the global economy is already under pressure from the delayed impact of interest-rate hikes, reduced trade, uncertainty around the upcoming US election, and China's economic slowdown, said Ahmet Kaya, a principal economist at the UK's National Institute of Economic and Social Research."War in the Middle East could exacerbate the instabilities in the global economy, further increase the uncertainties, harm disinflationary efforts, and eventually reduce the global GDP growth," he told Business Insider.Kaya warned the conflict could accelerate inflation by disrupting international supply chains and causing the cost of energy and shipping to rise.

 

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