Just as economists began to fret over a third wave of inflation following the Covid-19 pandemic and the outbreak of the Ukraine war, the conflict in Israel-Gaza has thrown an oil shock into the mix, according to a leading ratings agency.
Talk in trading rooms has turned to the potentially damaging effect the Israel-Gaza conflict could have on global markets and economies, even if the 11-day war has not yet had a serious effect on the world economy, according to the ratings agency, Standard and Poors.
“We've got inflation under control. It looks like it's heading downwards, and we get a shock to global oil prices,” S&P's global chief economist, Paul Gruenwald told The National on Tuesday.
“Is that going to feed through to another round of inflation? Is that going to cause central banks to pause for longer? Are they actually going to have to raise rates another round? Which would be a bad scenario.”
Having recently returned from the IMF and World Bank meetings in Morocco, when proceedings were largely overshadowed by the Hamas attack just days before, he said “we haven't seen the macro [economic] needle move yet”.
“Obviously we've had some de-risk in the markets and Treasuries and other safe assets have gone up,” he told The National.
“What we're watching is whether the conflict will spread and start to impact what we call real variables in the region – we haven't seen that so far.”
“Oil is another important variable, but I would say it's very early days, so even though the macro needle hasn't moved yet, it doesn't mean it won't.
“But, at this point, we're just trying to identify the risks and the channels and we'll continue to do our macro surveillance.”
Nonetheless, there has been no shortage of politicians, ministers and officials voicing fears of what could befall the global economy should the conflict escalate and broaden, particularly if it sucks in others.
Economists at Bloomberg predicted that if Iran were to be brought directly into conflict with Israel, the price of oil would rise to $150 a barrel and world economic output would take a $1 trillion hit.
The chief executive of JP Morgan, Jamie Dimon, called it the “most dangerous time in decades”.
Even before the outbreak of the Israel-Gaza conflict, the outlook for the global economy was subdued at best. Interest rate rises were seen as finally having the effect they were designed for and, as such, demand was deemed to have peaked.
In its fourth quarter global economic outlook, S&P forecasted “a period of subpar growth fuelled by higher-for-longer rates ahead, with a relatively slower and softer adjustment back to steady states; this is conditional on strong labour markets”.
But even though economies seem to be on a better footing in the battle against inflation, geopolitical shocks still have the ability to throw much off course.
Kathleen Brooks, founder of Minerva Analysis, said if the conflict continued to put pressure on the price of oil, it could feed through to “consumer inflation expectations in the West in the coming month”.
“This could then impact interest rate expectations and investor sentiment.”
Speaking in Marrakesh, Gita Gopinath, the deputy head of the IMF, noted that the world was potentially facing a “large number of shocks”.
Because debt is at record levels at the same time as economies are having to keep interest rates higher for longer, there is “a lot that could go wrong”, she said.
The five pillars of Islam
COMPANY%20PROFILE
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Global state-owned investor ranking by size
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United States
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China
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UAE
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Japan
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Norway
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Canada
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Singapore
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Australia
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Saudi Arabia
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South Korea
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Red flags
- Promises of high, fixed or 'guaranteed' returns.
- Unregulated structured products or complex investments often used to bypass traditional safeguards.
- Lack of clear information, vague language, no access to audited financials.
- Overseas companies targeting investors in other jurisdictions - this can make legal recovery difficult.
- Hard-selling tactics - creating urgency, offering 'exclusive' deals.
Courtesy: Carol Glynn, founder of Conscious Finance Coaching
It
Director: Andres Muschietti
Starring: Bill Skarsgard, Jaeden Lieberher, Sophia Lillis, Chosen Jacobs, Jeremy Ray Taylor
Three stars
COMPANY%20PROFILE
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BMW M5 specs
Engine: 4.4-litre twin-turbo V-8 petrol enging with additional electric motor
Power: 727hp
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UAE-based players
Goodlands Riders: Jamshaid Butt, Ali Abid, JD Mahesh, Vibhor Shahi, Faizan Asif, Nadeem Rahim
Rose Hill Warriors: Faraz Sheikh, Ashok Kumar, Thabreez Ali, Janaka Chathuranga, Muzammil Afridi, Ameer Hamza
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Price, base: From Dh77,900
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What is an FTO Designation?
FTO designations impose immigration restrictions on members of the organisation simply by virtue of their membership and triggers a criminal prohibition on knowingly providing material support or resources to the designated organisation as well as asset freezes.
It is a crime for a person in the United States or subject to the jurisdiction of the United States to knowingly provide “material support or resources” to or receive military-type training from or on behalf of a designated FTO.
Representatives and members of a designated FTO, if they are aliens, are inadmissible to and, in certain circumstances removable from, the United States.
Except as authorised by the Secretary of the Treasury, any US financial institution that becomes aware that it has possession of or control over funds in which an FTO or its agent has an interest must retain possession of or control over the funds and report the funds to the Treasury Department.
Source: US Department of State
The specs
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RESULTS
Bantamweight:
Zia Mashwani (PAK) bt Chris Corton (PHI)
Super lightweight:
Flavio Serafin (BRA) bt Mohammad Al Khatib (JOR)
Super lightweight:
Dwight Brooks (USA) bt Alex Nacfur (BRA)
Bantamweight:
Tariq Ismail (CAN) bt Jalal Al Daaja (JOR)
Featherweight:
Abdullatip Magomedov (RUS) bt Sulaiman Al Modhyan (KUW)
Middleweight:
Mohammad Fakhreddine (LEB) bt Christofer Silva (BRA)
Middleweight:
Rustam Chsiev (RUS) bt Tarek Suleiman (SYR)
Welterweight:
Khamzat Chimaev (SWE) bt Mzwandile Hlongwa (RSA)
Lightweight:
Alex Martinez (CAN) bt Anas Siraj Mounir (MAR)
Welterweight:
Jarrah Al Selawi (JOR) bt Abdoul Abdouraguimov (FRA)
ICC Awards for 2021
MEN
Cricketer of the Year – Shaheen Afridi (Pakistan)
T20 Cricketer of the Year – Mohammad Rizwan (Pakistan)
ODI Cricketer of the Year – Babar Azam (Pakistan)
Test Cricketer of the Year – Joe Root (England)
WOMEN
Cricketer of the Year – Smriti Mandhana (India)
ODI Cricketer of the Year – Lizelle Lee (South Africa)
T20 Cricketer of the Year – Tammy Beaumont (England)
UAE currency: the story behind the money in your pockets
Conflict, drought, famine
Estimates of the number of deaths caused by the famine range from 400,000 to 1 million, according to a document prepared for the UK House of Lords in 2024.
It has been claimed that the policies of the Ethiopian government, which took control after deposing Emperor Haile Selassie in a military-led revolution in 1974, contributed to the scale of the famine.
Dr Miriam Bradley, senior lecturer in humanitarian studies at the University of Manchester, has argued that, by the early 1980s, “several government policies combined to cause, rather than prevent, a famine which lasted from 1983 to 1985. Mengistu’s government imposed Stalinist-model agricultural policies involving forced collectivisation and villagisation [relocation of communities into planned villages].
The West became aware of the catastrophe through a series of BBC News reports by journalist Michael Buerk in October 1984 describing a “biblical famine” and containing graphic images of thousands of people, including children, facing starvation.
Band Aid
Bob Geldof, singer with the Irish rock group The Boomtown Rats, formed Band Aid in response to the horrific images shown in the news broadcasts.
With Midge Ure of the band Ultravox, he wrote the hit charity single Do They Know it’s Christmas in December 1984, featuring a string of high-profile musicians.
Following the single’s success, the idea to stage a rock concert evolved.
Live Aid was a series of simultaneous concerts that took place at Wembley Stadium in London, John F Kennedy Stadium in Philadelphia, the US, and at various other venues across the world.
The combined event was broadcast to an estimated worldwide audience of 1.5 billion.
UAE currency: the story behind the money in your pockets
World%20Food%20Day%20
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The specs
Engine: 1.5-litre turbo
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Starring: Raed Zeno, Hadi Awada, Dr Mohammad Abdalla
Director: Raed Zeno
Rating: 4/5
WOMAN AND CHILD
Director: Saeed Roustaee
Starring: Parinaz Izadyar, Payman Maadi
Rating: 4/5
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COMPANY PROFILE
Name: Xpanceo
Started: 2018
Founders: Roman Axelrod, Valentyn Volkov
Based: Dubai, UAE
Industry: Smart contact lenses, augmented/virtual reality
Funding: $40 million
Investor: Opportunity Venture (Asia)
The more serious side of specialty coffee
While the taste of beans and freshness of roast is paramount to the specialty coffee scene, so is sustainability and workers’ rights.
The bulk of genuine specialty coffee companies aim to improve on these elements in every stage of production via direct relationships with farmers. For instance, Mokha 1450 on Al Wasl Road strives to work predominantly with women-owned and -operated coffee organisations, including female farmers in the Sabree mountains of Yemen.
Because, as the boutique’s owner, Garfield Kerr, points out: “women represent over 90 per cent of the coffee value chain, but are woefully underrepresented in less than 10 per cent of ownership and management throughout the global coffee industry.”
One of the UAE’s largest suppliers of green (meaning not-yet-roasted) beans, Raw Coffee, is a founding member of the Partnership of Gender Equity, which aims to empower female coffee farmers and harvesters.
Also, globally, many companies have found the perfect way to recycle old coffee grounds: they create the perfect fertile soil in which to grow mushrooms.
Sole survivors
- Cecelia Crocker was on board Northwest Airlines Flight 255 in 1987 when it crashed in Detroit, killing 154 people, including her parents and brother. The plane had hit a light pole on take off
- George Lamson Jr, from Minnesota, was on a Galaxy Airlines flight that crashed in Reno in 1985, killing 68 people. His entire seat was launched out of the plane
- Bahia Bakari, then 12, survived when a Yemenia Airways flight crashed near the Comoros in 2009, killing 152. She was found clinging to wreckage after floating in the ocean for 13 hours.
- Jim Polehinke was the co-pilot and sole survivor of a 2006 Comair flight that crashed in Lexington, Kentucky, killing 49.
