World Bank President Ajay Banga Warns of Economic Impact if Israel-Gaza Conflict Widens

WASHINGTON – World Bank President Ajay Banga has cautioned that a significant escalation of the ongoing conflict between Israel and Gaza could have severe repercussions for the global economy. In an interview with Reuters on Tuesday, Banga emphasized that while the war’s current impact on the world economy is relatively limited, a widening conflict could drag in larger economies, particularly those tied to commodity exports.

Banga expressed deep concern over the steep loss of civilian lives, calling the toll “unconscionable” on all sides, and warned that a broader conflict could impact key sectors such as minerals, metals, and oil. “If it spreads regionally, then it becomes a completely different issue,” he said, referring to countries with greater contributions to the global economy.

The war between Israel and Hamas has already taken a massive toll, with Israeli strikes causing widespread devastation in Gaza, and escalating violence in Lebanon adding to the region’s instability. Banga noted that damage from Israeli strikes in Gaza is estimated at $14-20 billion, with Lebanon also bearing the brunt of the conflict.

The World Bank has provided $300 million in aid to the Palestinian Authority, but Banga acknowledged this is far from enough to manage the crisis. He stressed the need for both private and public resources to support any future peace-building efforts.