Israel-Hamas war poses risk of global market contagion, economist says (cnbc.com)
- As the Israel-Hamas conflict further intensifies, the risks to the global economy are growing, economist Mohamed el-Erian said Monday.
- The impact on global markets was initially limited, as investors viewed the conflict as contained. However, the prospect of a regional spillover has added to a sense of unease.
- “The longer this conflict goes on, the more likely it will escalate. The higher the risk of escalation, the higher the risk of contagion to the rest of the world in terms of economics and finance,” el-Erian told CNBC.
“The higher the risk of escalation, the higher the risk of contagion to the rest of the world in terms of economics and finance,” he continued.
El-Erian said that such contagion would compound the already pervasive issues facing the global economy, including stagnating growth, stubbornly high inflation and the broader fragmentation of markets.
“This conflict, in a way, amplifies all of the challenges that existed and that were already significant,” he said.