World Bank head warns of possible global economic repercussions from Gaza escalating war


(MENAFN) World bank President Ajay Banga has expressed concern that a significant escalation of the conflict in Gaza could have serious repercussions for the global economy. He described the tragic loss of civilian lives in the region as "unacceptable." Although the ongoing war has not yet greatly impacted the global economy, Banga warned that a wider conflict could involve countries that are crucial to global economic growth, particularly those that export commodities.

Banga emphasized the human toll of the war, stating, "This massive loss of life, women, children, and other civilians is unacceptable to all parties." He explained that the economic ramifications of the war largely depend on its extent. If the conflict were to expand regionally, it could threaten areas that contribute significantly to the global economy, particularly in terms of financial resources and natural resources like minerals and oil.

While some Western nations are advocating for a ceasefire between Israel and Hezbollah in Lebanon, as well as in Gaza, the United States has reaffirmed its support for Israel, pledging to provide it with anti-missile systems and troops. Israel initiated its military campaign in Gaza following a Hamas attack on October 7, 2023, which resulted in the deaths of 1,200 people and the capture of around 250 hostages, according to Israeli statistics. In contrast, Gaza health authorities report that over 42,000 Palestinians have died due to the Israeli attacks.

Banga estimated that the material damage caused by the Israeli military actions in Gaza is currently between USD14 and USD20 billion, with additional costs arising from the bombings in southern Lebanon. The World Bank has allocated USD300 million to the Palestinian Authority, significantly more than its typical aid, to assist in managing the crisis. He noted that while this aid is substantial, it is only a fraction of the "huge sum" required for recovery. Additionally, Banga mentioned that the World Bank has convened a group of experts from various countries to explore both immediate and long-term strategies for achieving peace in the region.

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