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Regional Conflicts with Global Costs

During the last few months, several regional conflicts have escalated, whether it is Serbia-Kosovo or Armenia-Azerbaijan. However, the conflict between Israel-Hamas has surprised the world community. Though there have been reports that Iran might have supported the intrusion it is early to confirm the same.

In a world that has seen a pandemic, high inflation, a shortage of food grains and a large-scale war between Ukraine- Russia. Such conflicts ass to the costs by keeping the global issues and concerns high for longer. In the short term, the loss of lives is the heaviest. In the medium term, the losses turn out to be economical as well.

The world of information is connected via the internet and news travels smoothly. The physical world is still very much traditional, almost everything that we buy has travelled via container ships. Conflicts like these especially in important trading routes impact the cost that eventually impacts the cost of goods including energy and food.

Whether we are in the middle or end of such a period of conflict is anyone's guess. But as the frequency and geographical spread rise would mean that inflation on a global level is not going to reduce easily. This would mean that the second or “last” phase of the inflation fight might be more tough and volatile than investors estimated.


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