Prolonged regional conflicts can significantly impact global economic growth by driving up energy prices, which may reduce projected growth rates; for example, a West Asia war extending beyond a month could push oil prices to $120-140 per barrel, potentially lowering global growth from 3.1% to 2.5% or lower, though technological innovations like AI can partially offset these negative effects.
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#GitaGopinath Explains What Happens If #IranWar Doesn't End Soon | WATCHAjouté :
I I think there's a still a very high level of uncertainty about how this war will play out. I do worry that markets are not pricing in sufficiently this risk of a prolonged war in West Asia. If this continues for another month, we're looking at oil prices that could go up to like 120 and $140 a barrel and could stay there for much longer. In that scenario, we could have global growth which is now projected at 3.1% going down to say 2 and a.5% and even closer to 2%. I think that risk very much exists even if it's not being priced in markets. Uh right now because there is still the optimism that there will be a deal and that we this situation will resolve relatively quickly. different parts of the world are being affected differently by it and like I said the AI story is offsetting the negativity that's coming from this developments in West Asia for some countries uh in the Good.
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