EBRD warns of global economic risks due to Middle East conflict

On Thursday, the European Bank for Reconstruction and Development (EBRD) released a report on the economic impact of the ongoing conflict in the Middle East. The bank stated that oil prices have risen by approximately 40-45% since the start of hostilities between the U.S.-Israel coalition and Iran four weeks ago. On the day of the report, Brent crude oil was trading at over $105 per barrel. The EBRD noted that every 10% increase in oil prices typically reduces global growth by 0.1 percentage points. If oil prices remain above $100 per barrel for an extended period, global growth could decline by at least 0.4 percentage points. Additionally, inflation is expected to rise by more than 1.5 percentage points under these conditions. The bank highlighted that economies with high energy import costs and strong ties to the Gulf region are the most vulnerable. Future growth projections for regions within the bank's mandate are expected to be revised downward.