The World Bank warned of the repercussions of the confrontation between Israel and Gaza, stressing that this is an unnecessary economic shock that will make it difficult for central banks to achieve a smooth reduction in inflation in many economies if it spreads.

“It is a humanitarian tragedy and an economic shock that we do not need,” World Bank President Ajay Banga said on the sidelines of the annual meetings of the World Bank and the International Monetary Fund in Morocco.

He added, “Central banks had begun to feel some confidence that there was an opportunity to achieve a soft reduction in inflation, and this (conflict) will make it more difficult.”

He pointed out that the direct economic impact of the confrontation is less than it was at the beginning of the events in Ukraine last year because the conflict between Israel and Gaza does not affect exports of oil, grains and fertilizers.

But he added that the effect is rippling through financial markets, with dollar assets suddenly rising.

Banga reported that the World Bank temporarily suspended its operations in the Gaza Strip and evacuated a number of its employees because it had become a “war zone,” but its operations in the Palestinian territories in the West Bank are still continuing.

He added that the European Union “made a mistake” in the beginning by announcing the cutting of all aid to the Palestinian territories in response to Hamas’ attack on Israel, which was later retracted.

Source: National Iraqi News Agency