Israel-Hamas war poses risk of global market contagion

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As the Israel-Hamas war draws into into its fourth week, the risks to the global economy are rising, economist Mohamed el-Erian said Monday.

The conflict ramped up on Monday, after Israeli military said it had widened its ground offensive in Gaza as it continues its assault in response to the Oct.7 terror attacks by the Hamas militant group.

El-Erian, who is chief economic advisor at Allianz, said that the longer the fighting continues, the greater the chance that it will escalate into a regional conflict with implications for global financial markets.

"The longer this conflict goes on, the more likely it will escalate," el-Erian told CNBC's Dan Murphy during a panel session at the AIM Summit in Dubai.

"The higher the risk of escalation, the higher the risk of contagion to the rest of the world in terms of economics and finance," he continued.

El-Erian said that such contagion would compound the already pervasive issues facing the global economy, including stagnating growth, stubbornly high inflation and the broader fragmentation of markets.

"This conflict, in a way, amplifies all of the challenges that existed and that were already significant," he said.
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Kristalina Georgieva, head of the International Monetary Fund, on Wednesday dubbed the worsening Israel-Hamas conflict as another cloud on the horizon of an already gloomy economic outlook.
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The escalating Israel-Hamas conflict raises risks of global market contagion, economist says

As the Israel-Hamas conflict further intensifies, the risks to the global economy are growing, economist Mohamed el-Erian said Monday.

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