IMF: Middle East conflict could drive up inflation in Europe
10:18, Thursday, 09 November, 2023
The International Monetary Fund (IMF) has warned that the conflict in the Middle East between Hamas and Israel could drive up inflation as central banks continue the battle to bring it down. During a media conference in Brussels, Alfred Kammer, the Director of the European Department at the IMF, said in his opening remarks that inflation could surprise on the upside.
“The Israel - Gaza conflict has already impacted energy prices, which could drive up inflation in Europe more generally,” he said at the meeting to coincide with the publication of the IMF’s new Regional Economic Outlook report for Europe.
“The Initial impact on oil prices has now fully reversed. We saw an increase in natural gas prices by 10%. The conflict has had a limited impact so far on European economies on the price side and further impact will depend on the duration and intensity of the Middle East conflict,” he said.
As such, the pricing side continues to be carefully watched by investors due to the implications of potential rising oil prices on the fight against inflation.