Middle East, the analysis that overturns everything: why “geopolitical risks are increasing”

The whole world is worried about the fate of the Middle East. Any move now could upend everything. In fact, ever since Iran directly attacked Israel last Saturday, there has been constant talk of the possibility of an escalation of the conflict. The risk is that Tehran responds by deploying all its forces and showing its muscles. “Iran’s recent attack on Israel represents a dangerous expansion of the war between Israel and Hamas and increases the risk of a sharp escalation of the conflict.” This is what S&P intuited in an analysis entitled ‘”Increasing geopolitical risks as conflict between Iran and Israel expands despite immediate truce.” “The reporting” of the Iranian attack and the “coordination” for the defense “minimized the damage” and “avoided a large-scale regional conflict”, it was observed, adding that from an economic point of view “although the events of the last week signal a significant increase in geopolitical risk, the central narrative of our baseline scenario remains largely unchanged, including our baseline macroeconomic assumptions for major economies.”

However, the ratings agency warned, “our expectations will depend on the nature and extent of the Israeli response in the coming days.” “The medium-term trajectory remains risky, given the enormous challenges in finding a path to de-escalation. This means that key transmission channels that are affected by the conflict and could influence credit conditions will continue to be closely monitored. These include energy prices, supply chain disruptions, financial market volatility and resurgent inflationary pressures, which could worsen if the conflict reaches a turning point.” But what are the scenarios? “The Zionists had better behave rationally, because if they were to take military action against Tehran, we are ready to use a weapon that we have never used before”: this is what the spokesperson of the Parliament’s National Security Committee said, Abolfazl Amouei. “Israel will respond to Iran’s attack, but it will do so wisely and not instinctively,” Netanyahu declared.