World Bank: Middle East tensions undermine global efforts to address inflation

The World Bank said in a statement on Thursday that the ongoing tensions in the Middle East threaten to halt or even undermine some aspects of the recent progress made in addressing global inflation. In its forecasts for global commodity markets, the World Bank announced that the increasing tensions in the Middle East are putting upward pressure on commodity prices, especially oil and gold. He added, "It appears that the favorable deflationary factors resulting from moderation in commodity prices have ended," according to what was reported by the CNBC economic network. Regional tensions remain high more than 200 days after the devastating war waged by Israel in Gaza. The report included a statement by the World Bank Group's Chief Economist and First Vice President, Indermeet Gill, in which he said, "The decline in commodity prices, which is one of the main reasons for the decline in inflation, has basically stopped." He added, "This means that interest rates may remain higher than expectations for the cu rrent and next years." Gill continued, "Our world today is going through a difficult period, and a major energy shock could undermine much of the progress achieved in reducing inflation over the past two years." The bank said that if there were 'minor supply disruptions linked to the conflict,' the average price of a barrel of Brent crude could rise to $92, while 'severe disruptions' would raise the price to $100. The World Bank explained that this worst-case scenario would have the effect of raising global inflation by about one percentage point this year. Source: Maan News Agency