The IMF announced a slowdown in the global economy due to the conflict in the Middle East

The US and Israeli military operation against Iran will lead to higher prices and a slowdown in global economic growth. This became known on March 30 from a new study by the International Monetary Fund (IMF), which analyzes the effects of the war in the Middle East on energy, trade and finance.

"Despite the fact that war can affect the global economy in different ways, all roads lead to higher prices and slower [economic] growth <...> A short conflict can lead to a sharp increase in oil and gas prices before a market correction occurs. A prolonged period may lead to the preservation of expensive energy resources and create tension for countries relying on imports," the IMF said in a document published on its blog.

IMF analysts note that much in this situation will depend on how much the conflict in the Middle East drags on. However, regardless of this, the conditions for the development of the global financial system have already deteriorated significantly.

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Bloomberg reported on March 27 that the prolongation of military operations in the Persian Gulf region could reduce the economic output of the European Union (EU) by 0.6 percentage points. According to their data, EU Commissioner for Economy and Productivity Valdis Dombrovskis warned the finance ministers of the bloc's member states that, in addition to slowing economic growth, a protracted conflict would increase inflation by 1.1—1.5 percentage points, that is, to 2.5 percentage points, taking into account the 1 percentage point forecast earlier in November.

Bloomberg reported on March 19 that the cost of liquefied natural gas (LNG) in Europe increased by 35% amid Iran's attack on the facilities of the oil and gas company in Qatar, QatarEnergy. According to the agency, the Iranian attacks may also provoke a prolonged shortage of global gas supplies. It clarifies that the market is currently preparing for a "protracted shutdown" at the critically important LNG center, which provided about a fifth of the world's supply.

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