2023-10-26 09:43:16
The world is worried regarding the escalation of the Israeli-Palestinian conflict. Investors around the world are worried regarding the consequences of this war. This is because global economic growth is slowing down. The October 7 attack by Hamas in southern Israel was the latest chapter in decades of attacks in the region. But countries that were falling into recession have now been hit hard. The rise in crude oil prices has boosted inflation. Observers point out that if this situation continues, the economic recession will gain momentum. An economist warns that the Israel-Hamas war might plunge the global economy into recession and cause the stock market to fall by up to 20 percent.
How will the Indian market be affected?
This has implications for the Indian economy as well. Since the outbreak of the war, international crude oil prices have risen by more than five percent. Yields on US bonds are at a 16-year high.
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India is one country where changes in global oil supply will have a greater economic impact. The reason is that they are the largest importer of crude oil. If the war continues, it will also affect India’s economic growth. Crude oil supply disruption will create an increase in oil prices. This will cause the current account deficit to rise.
International crude oil prices will rise significantly if Iran, which supports Hamas, joins the war. This is because major oil producers Saudi Arabia and Russia have cut oil supply by 13 lakh barrels per day till the end of this year.
The war will also affect exports to Israel, but this is unlikely to have a major impact. But the stock market may be affected. The main exports from India to Israel are petrochemical products, pharmaceutical products etc. India also depends on Israel for diamonds and aircraft technology. Due to the ongoing conflict, there may be repercussions in this area as well. However, the impact on the agricultural sector is relatively low.
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