We stand on the brink of a global recession. Top economists raise the alarm
9:55 AM EST, November 6, 2023
The conflicts involving Israel and Hamas, as well as the invasion of Ukraine, are now viewed as potential catalysts for a global recession. The uncertainty surrounding these conflicts stokes fear, inspiring a pullback in consumption and investment. "These events have set the world on a new trajectory," state renowned economists.
Another crisis lurks on the horizon for the global economy. Prominent economists warn that the clash between Israel and Hamas, coupled with the invasion of Ukraine, could severely disrupt the global economic order.
In a recent interview with the "Sunday Times", BlackRock's CEO Larry Fink, head of the world's largest asset manager, expressed that the mix of atrocities committed by Hamas on October 7, following Israel's counter-attack on Gaza, and Russia's invasion of Ukraine last year, have rerouted the world towards "an entirely new future".
"Geopolitical risk is the chief element shaping our collective existence. Fear is escalating worldwide while hope is dwindling. An increase in fear triggers reductions in consumption and heightened spending. Consequently, over time, fear spawns recessions, and if it continues to escalate, the chances of recessions in Europe and the US will follow suit." explained Larry Fink.
Meanwhile, "The Guardian" reported a statement by Jamie Dimon, the CEO of JP Morgan, America's largest bank, who confessed that the combined impact of the conflicts between Israel and Hamas and Russia's invasion of Ukraine was both "terrifying and unpredictable".
"The current geopolitical landscape is the most imperative concern for our world's future - freedom, democracy, global food security, energy, immigration," listed the head of JP Morgan bank.
"Severe ramifications"
Dimon warns that this is "the most perilous time the world has seen in decades," and that an escalation of these conflicts could have "severe ramifications" on energy prices, food costs, international trade, and diplomatic relations.
A key reason the conflict between Israel and Hamas is viewed as a global economic threat is the world's reliance on oil from the region, which constitutes a third of the global market. Economists highlight the risk of oil price surges as a major factor that could propel the globe into a recession.
