Middle East Conflict Drives Regional Inflation and Growth Risks
Inflation across the region has generally increased and remains particularly high in West Asia. This increase is driven by global geopolitical tensions, specifically the ongoing conflict in the Middle East. The conflict affects economies through disruptions in supply chains, rising import inflation, current account risks, and the deterioration of trade terms. These factors weaken both consumption and investment. The pace of economic growth in developing Asia and the Pacific region slows down.
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