The global economy may be doomed if the conflict between Hamas and Israel escalates, according to the New York Times, citing a top economist at Ernst & Young, one of the world’s leading consulting and accounting services firms.
Gregory Daco, chief economist at EY-Parthenon, Ernst & Young’s global strategy consulting arm, told the New York Times that expanding military action in the Middle East would have “severe” consequences for the global economy, including a moderate recession, a drop in stock prices, and a $2 trillion loss.
Oil prices are expected to rise to $150 per barrel from the current $85, according to Daco.
The World Trade Organisation (WTO) warned last month that if the world splits into two trading blocs as a result of the escalating conflict between Israel and Hamas, global GDP could fall by 5% in the long run. The World Trade Organisation also reduced its 2023 forecast for global trade growth to 0.8% from 1.7% previously, citing a worsening manufacturing slowdown.
