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The growing tension between Israel and Hamas in the Middle East raises significant concerns in the global economic and political context.
The war in Israel and the Gaza Strip affects commodities, oil and could impact the BC's decision regarding the continuation of the Selic drop. The escalation of the conflict between Israel and Hamas in Middle East raises serious concerns in the global economic and political sphere.
Turbulence in exchange rate fluctuations and uncertainties regarding the prospect of economic recovery are just some of the potential consequences of this situation. A worrying development would be the postponement of hopes of a reduction in interest rates by the Central Bank (BC), which would have significant impacts on the reactivation of the Brazilian real estate market.
This war has the potential to cause significant impacts on both the global and Brazilian economies. As we know, geopolitical conflicts generate uncertainty in financial markets, causing exchange rate fluctuations and fluctuations on the stock exchange. The clash between Israelis and Palestinians has implications that transcend regional borders, echoing throughout the global economy, particularly in the commodity market, such as the agricultural sector.
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Israel x Hamas, oil and diplomacy
Brazil, as one of the main exporters of agricultural products, would face impacts on trade relations with other nations, generating indirect effects on the domestic economy. The increase in oil prices, which was already high before the conflict, is now under greater pressure.
Which is reflected in commodities and the financial market. The neutral stance of the Brazilian government, which condemns attacks against civilians on both sides and repudiates the escalation of violence, affirming its commitment to the two-state solution in the region and calling for peace, results in a neutrality that can generate some type of diplomatic displeasure by one of the parties involved.
On the other hand, the ongoing conflict between Russia and Ukraine adds yet another layer of instability to an already worrying global macroeconomic context. This conflict has significant implications for the region. Furthermore, with economic consequences that go beyond Ukrainian borders, generating ongoing concerns regarding commercial relations and trade flows in the region.
As is known, Ukraine plays a crucial role in supplying natural gas to Europe. Therefore, any interruption or instability in this flow could affect energy supplies and cause volatility in gas and oil prices.
In addition to the conflicts that generate uncertainty in the financial markets, the lack of political and economic stability in Brazil, together with the increase in the fiscal deficit and the evasion of international investors who prefer the North American market to the risk of Brazil and Latin America, undermines confidence of investors and has a negative impact on the business climate as a whole.
It is known that the real estate market is often the first to feel crises and is generally the last to recover from them. However, it is essential to keep in mind that the global economy is a complex topic and is constantly changing. Understanding its impact on real estate industry it's a big challenge.
Can war put the brakes on BC's foot?
Political and economic instability shakes market confidence, which could frustrate the prospects for a reduction in the Selic rate by the BC, impacting the recovery of the property market. This results in insecurity and a decrease in the launch of new projects, as indicated by the results released by construction companies and developers listed on the Stock Exchange.
According to statements by the president of the Central Bank, Roberto Campos Neto, the interest reduction strategy would only be changed in the event of a scenario that really affected inflation prospects. Therefore, until this happens, we will continue in a “soft landing” scenario. In other words, in practice, it can stimulate the market, even if international concerns and conflicts work against it. We hope that the market will overcome the wave of global pessimism and write its own history in such a complex and troubled period. *Rogério Santos is one of the founders of UBlink.
Read also: Results. Vale (VALE3) has a profit of US$2,85 billion in 3Q23. Companies. Petrobras (PETR4): Total oil production in 3Q23 rises 8% and reaches 2,8 million.
