Middle East Crisis Economic Impact

World Bank Chief: War Will Have Global Cascading Effects 

The war in the Middle East is expected to have cascading effects on the world economy, World Bank Chief Ajay Banga told Reuters.

Global GDP growth could be cut by 0.3 or 0.4 percentage points in a base scenario and up to 1 percentage point if the conflict continues. The big question, according to the top economist, is whether the ceasefire and this weekend's negotiations will lead to a lasting peace and the opening of the Strait of Hormuz.

- If it doesn't lead to that, and if the conflict were to break out again, would it have an even greater impact - or more long-term effects - on the energy infrastructure? Ajay Banga asks himself.

 

The Alarm: Shortage of Jet Fuel in Europe Within Three Weeks

The European Airports Association ACI Europe warns that fuel reserves are running out, according to the Financial Times. If the Strait of Hormuz is not fully opened within three weeks, a “systematic” shortage of jet fuel threatens, says a letter seen by the newspaper.

The warning is issued to the EU Commission’s Transport Commissioner Apostolos Tzitzikostas and he is urged to take immediate action.

“A supply shortage would seriously disrupt airport operations and air connections,” writes ACI.

The concern is reinforced by the increased pressure on aviation in the upcoming summer, according to the organization. 

 

Swedish growth
Swedish economy recovers slowly

The malaise of the Swedish economy continues. After two months of declines, GDP was stagnant in February, according to Statistics Sweden's GDP indicator.

The outcome was clearly weaker than expected – economists had expected an increase of 0.5 percent, writes TT.

On an annual basis, the economy grew by 1.6 percent in February, which points to a continued sluggish recovery.