- The International Monetary Fund (IMF) on Wednesday warned the United States of possible economic risks linked to the increasing geopolitical tensions surrounding Ukraine and Iraq.
In its annual report on the world’s biggest economy, the IMF said there exists a likelihood of a sharp escalation in the conflict surrounding Ukraine, as well as heightened geopolitical risk in the Middle East, which could lead to oil price spikes and disruptions in global financial, trade and commodity markets.Continue..
“If increasing geopolitical tensions surrounding Ukraine or Iraq were to lead to global financial and trade disruptions, higher commodity prices, and safe-haven capital flows, then the US dollar would appreciate and growth could fall by up to 0.2–0.8 percent in 2014-15,” the IMF said in its recent report.
Iraq has been gripped by instability ever since insurgents from a radical Sunni organization, called the Islamic State of Iraq and Greater Syria (ISIS), launched a massive anti-government offensive in spring seizing cities in the country’s northwest. It also took over Iraq’s largest oil refinery at Baiji and threatened to disrupt crude exports from this oil-rich country.
The conflict in Ukraine, meanwhile, drove a wedge between the United States and Russia, which washington claims to be pulling the strings in the ex-Soviet republic. Following US sanctions over Crimea’s re-unification with Russia, a number of Russia’s senior officials and executives warned this move could hurt US companies seeking to increase their share in Russia’s energy producing sector.
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