World Bank president Ajay Banga, on Tuesday, cautioned that a much broader escalation of the Israel-Gaza conflict could harm the global economy. During an interview with Reuters NEXT, Banga spoke about the devastating human toll of the war and warned of potential economic consequences if it spreads to larger, resource-rich countries.
“The unbelievable loss of life – women, children, civilians – is just unconscionable on all sides,” Banga said.He added that the economic impact so far has been limited but could worsen if the war brings in major contributors to global growth including major commodity exporters.
Highlighting the extent of the destruction, Banga estimated that damage from Israeli strikes in Gaza has likely reached between $14 billion and $20 billion, with bombing in southern Lebanon further adding to the devastation in the region.
“The economic impact of this war depends on how much it spreads. If it becomes regional, we are talking about far larger contributors to the world economy – not only in terms of dollars but also minerals, metals, and oil,” he said.
In response to the crisis, the World Bank has increased its financial support to the Palestinian Authority, providing $300 million—six times its usual contribution. However, Banga noted this aid was still “small” compared to the larger needs. The World Bank has also convened a team of experts from various countries, including Israel, Jordan, and Egypt, to explore further solutions.
“We’re going to have to figure out how to have that publicly discussed and debated and then find the resources for it,” Banga said, suggesting that the effort would require private and public resources.
Banga’s comments come as Western nations push for a ceasefire, while the United States continues to support Israel by sending additional military aid. The conflict, which began after Hamas‘ October attack, has already caused thousands of casualties on both sides.
Israel’s offensive against Hamas followed the militant group’s October 7 attack, which left 1,200 Israelis dead and around 250 taken hostage. According to Gaza’s health authorities, over 42,000 Palestinians have been killed in Israeli strikes.
According to the Lebanese health ministry, Israeli strikes have killed at least 2,350 people in Lebanon, left nearly 11,000 wounded, and displaced more than 1.2 million people.
