On October 11th, the website of the National News of the United Arab Emirates published an article titled "The conflict between Israel and Hamas has torn apart the global economic recovery". The content is compiled as follows:
Just as the world gradually settled down, uncertainty returned.
The crisis in Ukraine has lasted for nearly 600 days, and various economies have long established response mechanisms. But the conflict between Israel and Hamas has filled everything with uncertainty, and it goes far beyond that.
It is obvious that the market is shocked. Gold has always been a safe haven, and its price is rising, while oil prices and defense and military stocks are also rising. Aviation stocks fell. Forecasters do not know what to say or do. In the City of London, Wall Street, Dubai, and other financial centers, investment analysts, like most people, can only wait and see.
At present, people cannot see the end. This may evolve into something larger, broader, and more lasting, with profound impacts.
In terms of economy, Israel is not Ukraine, nor is it a granary for other parts of the world, nor does it have a large amount of fossil fuel resources.
However, if Iran becomes embroiled in the flames of war, the negative impact is likely to escalate sharply. Next, the supply of oil and the passage of oil tankers through the Strait of Hormuz will be affected. Saudi Arabia was about to reach a normalization agreement with Israel, but now its stance has been seriously challenged. What role will the United States and Russia play?
At present, all of this means inaction. The large commission plans that are currently being planned will remain in the planning stage for a period of time. Faced with this potential unpredictability and instability, no one wants to delegate.
Central bank governors around the world have been busy reducing inflation. They had just had a chance of winning this battle, but it is far from over. However, the possibility of reducing their stress has once again been put on hold.
As stated by the International Monetary Fund in its latest edition of the World Economic Outlook report, inflation remains high and above target in 93% of economies. The International Monetary Fund says that in most cases, inflation will not return to the expected level until 2025 at the earliest.
This report was prepared before the outbreak of the Israeli-Palestinian conflict, which means the situation may be even worse. Interest rates are unlikely to decline soon, and global economic growth will hit a bottom.
The International Monetary Fund has not provided much comfort. In short, before the outbreak of the Israeli-Palestinian conflict, the world economy was not prosperous either. It must be even harder now.
Although some countries are eager to try, the fact is that if the Gaza War expands, the economic situation of major countries in the world is not optimistic and it is difficult to intervene. The United States is struggling to reduce inflation. Russia is still embroiled in the long conflict and needs to deal with sanctions. China is cautiously stepping out of the impact of the epidemic.
Therefore, the key message conveyed by the market is to quietly watch and remain calm.