The economic effects of the conflict related to Iran are now gradually becoming visible. Meanwhile, World Bank chief Ajay Banga has warned the world that if the current ceasefire is broken, its consequences could be very serious. He clearly said that even if the war stops, its impact will remain on the global economy for a long time.
According to Ajay Banga, even if the ceasefire continues, the global economic growth rate may decline by 0.3% to 0.4%. But if the situation worsens and the ceasefire is broken, this decline could reach 1%. This will have a direct impact on business, energy market and financial system.
danger of rising inflation
A major impact of this crisis can also be seen on inflation. Banga said that even if the ceasefire continues, inflation may increase by 0.2% to 0.3%. However, if the conflict continues for a long time, it may increase to 0.9%. The biggest impact will be on developing countries, where inflation can go up to 6.7%.
Difficulties will increase due to energy crisis
The World Bank has already started talks with countries that are more dependent on energy imports. Especially small island countries may be more affected by this crisis. Preparations are also being made for emergency funding for such countries.
Gave strict advice to governments
Ajay Banga has warned governments not to get sucked into energy subsidies that are unsustainable in the long run. This may increase financial instability in the future. He said that countries should focus on diversifying their energy sources.
gave the example of nigeria
Giving the example of Nigeria, Banga said that the $20 billion refinery project there has strengthened energy security. This not only made the country self-reliant but also enabled it to export fuel to neighboring countries. He stressed that in future it is necessary to focus on alternative energies like nuclear, wind, solar and hydro. If this is not done, countries will again become dependent on traditional fuels, which may increase economic and environmental risks.
SK Sharma is a content writer who writes on news, entertainment, and lifestyle topics. She has over four years of experience and is known for conveying information in simple and clear language.
