Holiday Ayo - The outbreak of the Israel-Hamas conflict in the Middle East has raised new concerns about the global economy, which is still haunted by uncertainty.

The International Monetary Fund (IMF) said the global economic recovery was slowing down due to the war between Israel and Hamas. 

This economic slowdown is exacerbating conditions that have not fully recovered due to the COVID-19 pandemic and the war between Russia and Ukraine. 

The war between Israel and Hamas last weekend proved that global conditions were unpredictable. This also affects the pace of the economy amidst global uncertainty. 

In its latest World Economic Outlook, the IMF underscored the fragility of the global economic recovery.

Global economic growth for this year is predicted at 3% and is slightly lower than expected. Then for 2024 it will be 2.9%.

“We see that the global economy is teetering, and is not running well," said IMF Chief Economist, Pierre Olivier Gourinchas, quoted from The New York Times, Tuesday (10/9/2023).

"The broader theme here is geoeconomic fragmentation, which is something we are experiencing, and we are seeing signs of it increasing, and we are concerned that this could also slow global economic activity," he added. 

The rate of economic growth in various parts of the world has also slowed. Like the European economy, where since Russia invaded Ukraine in February 2022, European governments have been trying hard to get away from excessive dependence on Russian natural gas. 

In the 20 countries that use the euro or in the European area, the IMF estimates that growth will slow to only 0.7% this year from the previous 3.3% in 2022. 

Germany, Europe's largest economy, is expected to experience a contraction of 0.5%.  High interest rates, persistent inflation and the impact of rising energy prices are also expected to slow growth in the UK to 0.5% this year from 4.1% in 2022. 

Sub-Saharan Africa is also experiencing this slowdown. Growth is projected to contract this year by 3.3 percent, although the outlook is brighter next year, when growth is forecast at 4 percent. 

Huge debts also hang over many countries in Europe. Average debt now amounts to 60% of total output in the region, double what it was a decade ago. Higher interest rates contribute to soaring repayment costs.

The World Bank also said the same thing that world economic conditions have not fully recovered from the pandemic and the Russia vs Ukraine war. 

So far, a number of efforts have been made by stakeholders to reduce the impact of the decline in economic growth. 

“The economy is in a difficult situation," said World Bank President Ajay Banga. 

Even so, he believes the impact of the war between Israel and Hamas is not as big as the war between Russia and Ukraine. 

If we look back, the impact of the war between Russia and Ukraine extends to the impact of increasing oil and food prices.

This happens because Russia and Ukraine are oil and food producers. Russia as an energy producer, namely oil and Ukraine's status as a major exporter of grain and fertilizer. 

Even though it is considered that it will not be as serious as the impact of the war between Russia and Ukraine, the war between Israel and Hamas must be watched out for. The threat of crisis could still occur as a result of the war.