The Israel and Gaza war: Economic repercussions

The tragic loss of life and the risks to peace in Israel, Gaza, and the rest of the region clearly are foremost on people’s minds. We provide here a brief discussion of the possible economic repercussions, bearing in mind the extreme uncertainty characterizing the situation. The repercussions of the crisis are dependent on the extent and duration of the fighting, associated geopolitical tensions, and the possible occurrence of terrorist attacks. While the overall reaction of financial markets has been relatively muted so far, the risks of an intensification and broadening of the conflict are material, and their potential fallout could be severe, especially for countries in the region.

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