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Israel Hamas war now brings fresh challenges to global economy, India watchful

Israel has declared its intent to completely destroy Hamas in Gaza

The International Monetary Fund has warned that the Israel-Hamas war could be the new “new cloud” which could dent global economy.

“Very clearly, this is a new cloud on not the safest horizon for the world economy, a new cloud darkening this horizon,” Kristalina Georgieva, IMF chief said at a press conference.

The conflict will have a direct implication on global oil prices.

“It’s a humanitarian tragedy and it’s an economic shock we don’t need,” separately World Bank President Ajay Banga told Reuters.

Indian policymakers said that while it is too early to analyse the impact of the war, steps are being taken to ensure that the country’s economy does not get dented.

India imports more than 80 per cent of its total oil requirements. “At this juncture, we don’t see any major disruption in the economy but it is needless to say that the war is a cause for serious concern. We have to be very cautious and watchful. We need to be ready with all contingency plans…whatever we can,” a senior government official said on condition of anonymity.

Meanwhile, according to New York Times, US Treasury Secretary Janet Yellen has said that the Israel-Gaza war was a potential concern for the global economy, signaling that additional U.S. sanctions could be coming in response to the attack on Israel by Hamas.

The news organisation said that Yellen did not rule out reversing a decision made last month — to unfreeze $6 billion of Iranian funds in exchange for the release of American hostages — if it is determined that Iran was involved in the attack by Hamas.

Also read: Israel-Hamas conflict should not dampen India’s growing ties with Iran