Economic experts are calling for re evaluation of the economic fundamentals to take into account the new developments in the global economy.
8 days ago , the Israel Palestinian conflict reached a boiling point becoming a fully fledged conflict with both countries targeting each other’s air spaces . This had come with loss of lives and property damage of a mass scale in addition to displacement of people.
International bodies like the UN project that the conflict would result into the worst humanitarian catastrophe since world war 2 incase no negotiated outcome is reached soon .
With this conflict flaring and affecting neigh boring countries like Qatar that closed her airspace for international air travels leading to temporary suspension of flights among others , the global energy markets haven’t remained the same since the conflict began.
Oil prices oscillated on Monday, touching a five-month high before erasing most gains as oil and gas transit continued on tankers from the Middle East after U.S. airstrikes against Iran at the weekend.
Brent crude futures were up 16 cents, or 0.2%, at $77.17 a barrel by 1307 GMT while U.S. West Texas Intermediate crude rose 14 cents, or 0.2%, to $73.98.
The Brent and WTI crude benchmarks touched five-month highs of $81.40 and $78.40 respectively on Monday before see-sawing in positive and negative territory throughout the European trading session.
Prices have risen since the start of the conflict on June 13 on mounting fears around Middle East crude supply, in particular the risk that Iran could retaliate by closing the Strait of Hormuz, through which about a fifth of global oil supply flows.
Economist Stephen Kaboyo who is the MD Aplha Capital told us that these increases in price will most likely affect global economic projections , reduce continental growth figures and disrupt the national economic outlook.
“We have just read the budget , which promised economic growth in the ranges of about 6-7% but I don’t see that happening when the global economic outlook already being revised downwards “
The economist calls for urgent re assessment of the economy by bodies such as the Ministry of Finance which man’s the fiscal policy , and the Bank of Uganda which manages the country’s monetary policy.
Asked about the potential of this conflict onto the Ugandan economy through the route of fuel supply shocks , the Permanent Secretary of the Ministry of Energy and Mineral Development Eng. Irene Batebe told us that these external shocks, are acknowledged but they pose no greater threat to Uganda’s fuel supply.
“What we are getting, is that these are external shocks but we are working with our partners, to evaluate the impact .
“ I have tasked my economics team to analyse the situation for now , but it is true that the contribution of Iran to this to the world stock is minimal, and the stocks that are currently held globally by OPEC of about 5-6 million barrels per day should support us in cushioning any major escalation. “ Batebe added
According to the ministry Uganda largely sources her fuel from the Arabian Gulf, the UAE and Singapore and India.
