World Economic Forum: Saudi Arabia warns of economic fallout from Gaza war

Saudi Arabia on Sunday called for regional “stability,” warning of the effects of the ongoing Israel-Hamas war on global economic sentiment at the start of a summit attended by a host of Gaza mediators.

US Secretary of State Antony Blinken, Palestinian leaders and high-ranking officials from other countries trying to broker a ceasefire between Israel and Hamas are on the guest list for the summit in Riyadh.

The Gaza war along with conflicts in Ukraine and elsewhere put “a lot of pressure” on the economic “mood,” Saudi Finance Minister Mohammed al-Jadaan said at one of the first panel discussions of the two-day World Economic Forum (WEF) special meeting in Riyadh.

“It is very, very unfortunate to see loss of lives, wherever that is. Civilian lives are important whether it is in Ukraine or in Palestine or elsewhere,” al-Jadaan said. “And therefore, you know when you have conflicts of this nature in your region, it puts a lot of pressure in the emotions, on the mood. It is not a secret that economy is impacted by the mood, economy is impacted by perception, by the sentiment.”

He said that “cool-headed countries and leaders and people need to prevail, and you need to make sure that you actually de-escalate.”

“The region needs stability,” al-Jadaan said.

Al-Jadaan warned that geopolitics may be the single biggest risk to the world economy that’s already facing slower growth and elevated interest rates.

“Today, to me, geopolitical risks are possibly the No. 1 risk as you look at the global economy,” al-Jadaan said. “Policymakers will need to be very agile in dealing with this,” he said, adding that tensions affect economies differently, which can bring fragmentation and protectionism.

The war in Gaza, which has sent regional tensions soaring, began with an unprecedented attack on southern Israel by Palestinian militant group Hamas on October 7.

The attack resulted in the deaths of about 1,170 people, mostly civilians.

Israel estimates that 129 hostages seized by militants on October 7 are still being held in Gaza, including 34 the military says are dead.

Vowing to destroy Hamas, Israel’s retaliatory offensive has killed at least 34,388 people in Gaza, mostly women and children, according to the health ministry.

“The world is today walking a tightrope right now, trying to balance security and prosperity,” Saudi planning minister Faisal al-Ibrahim told a press conference on Saturday previewing the summit.

“We meet at a moment when one misjudgment or one miscalculation or one miscommunication will further exacerbate our challenges.”