WB warns of global economic impact from escalating conflict in the Middle East

World Bank (WB) President Ajay Banga warned on October 15 that escalating conflicts in the Middle East could have major impacts on the global economy, and said that the loss of civilian lives in the region was "unacceptable."

The Middle East conflict has so far had a relatively small impact on the global economy, but a wider conflict would draw in other countries that are larger contributors to global growth, including commodity exporters, Banga told Reuters NEXT Newsmaker.

“First of all, I think the staggering human toll is unacceptable on all sides of the conflict,” said Mr. Banga. “On the other hand, the economic impact of this conflict depends very much on how widespread it is.”

Several Western countries are pushing for a ceasefire between Israel and Lebanon, as well as in the Gaza Strip. Banga said the economic cost of Israel’s current offensive in Gaza could be between $14 billion and $20 billion, and the devastation caused by Israel’s bombing of southern Lebanon would add to the total.

Mr. Banga said the World Bank had provided $300 million, six times its normal level of assistance, to the Palestinian Authority to help them manage the crisis on the ground, but that was a small amount compared to what they would need in the future.

The World Bank president added that the bank has also assembled a group of experts from Jordan, Israel, Palestine, Europe, the United States and Egypt to study short-term and long-term actions they could take if a peace deal could be reached.