WB head warns of impact of escalating Middle East war on global economy

World Bank President Ajay Banga warned that a wider Israel-Gaza war could significantly impact the global economy, calling the civilian casualties “unconscionable.”

In a Reuters NEXT interview on Tuesday, he noted that while the current war’s impact on the economy has been limited, a broader hostilities could involve key global growth contributors, including commodity exporters.

“The economic impact of this war… depends a great deal on how much this spreads,” he said. A regional escalation would involve larger contributors to the global economy, particularly in sectors like minerals, metals, and oil.

Some Western countries are advocating for a ceasefire between Israel and Lebanon, as well as in Gaza. However, the US, Israel’s strongest ally, continues its support, sending anti-missile systems and troops.

Gaza health authorities reported over 42,000 Palestinian deaths, and the US has warned Israel that military support may be limited if aid to Gaza does not improve within 30 days. Israeli strikes have also killed at least 2,350 people in Lebanon and wounded nearly 11,000, with over 1.2 million displaced.

Banga estimated war damage in Gaza to be between $14-20 billion, with additional destruction in southern Lebanon. The World Bank has provided $300 million to the Palestinian Authority, though far more will be needed.

Banga also revealed that a group of experts from Jordan, Israel, Palestine, Europe, the US, and Egypt had been formed to explore potential short- and long-term actions if a peace agreement is reached. Public and private resources will be necessary for this effort.

Attribution: Reuters

Subediting: M. S. Salama