Conflicts like Russia-Ukraine, Israel-Hamas increased regional instability: Economic Survey of India

Posted by admin_kas on 2025-02-01 20:17:04 |

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Srinagar, Feb 01: The Economic Survey of India which was recently tabled in the Parliament has pointed out that 2024 despite being an eventful year but the adverse developments like the Russia-Ukraine conflict and the Israel-Hamas conflict increased regional instability.

The Survey reads that the 2024 was globally an eventful year as it witnessed unprecedented electoral activity on the political front, with more than half of the global population voting in major elections across countries.

"But the adverse developments like the Russia-Ukraine conflict and the Israel-Hamas conflict impacted energy and food security, leading to higher prices and rising inflation. Cyberattacks also became more frequent and severe, with growing human and financial consequences due to the increasing digitisation of critical infrastructure," it reads.

It reads that geopolitical tensions have reshaped global trade while the geopolitical risks and policy uncertainty, especially around trade policies, also contributed to increased volatility in global financial markets

"Nonetheless, global economic growth has remained fairly moderate. The global economy grew by 3.3 percent in 2023. The International Monetary Fund (IMF) has projected growth of 3.2 per cent and 3.3 per cent for 2024 and 2025, respectively," it reads.

it further reads that over the next five years, global growth is expected to average around 3.2 per cent, "which is modest by historical standards."

It reads that despite higher interest rates, advanced economies (AEs) witnessed stable grow thin the first half of 2024.

"A notable trend was the slowdown in global manufacturing, especially in Europe and parts of Asia, due to supply chain disruptions and weak external demand. In contrast, the services sector performed better, supporting growth in many economies," it reads.

It reads that inflationary pressures eased in most economies. However, services inflation has remained persistent.

"Geopolitical risks remain elevated due to ongoing conflicts, which pose significant risks to the global economic outlook. These risks can influence growth, inflation, financial markets, and supply chains," it reads.

The survey reads that an intensification of the evolving conflicts in the Middle East or the Russia-Ukraine conflict, could lead to market repricing of sovereign risk in the affected regions and disrupt global energy markets.

"The oil market is well-supplied for now. However, any damage to energy infrastructure could tighten supply, adding uncertainty to the global economic outlook," it reads.