Political turmoil has potential for negative effects on Middle East economic prospects

Because of the recent world events in the Middle East and around the world the focus has again turned to rising energy costs and higher food prices.
In the second-quarter issue of the Global Economic Outlook, Deloitte member firm economists examine the effects of these events and offer their oppinion on global food inflation and soaring energy costs. The report also brings up the rise of income inequality across the world.
The report includes:
• Policy makers in Japan will keep a watchful eye on the currency lest the yen rise too rapidly; however, the authors state that Japan’s rebuilding efforts could also rekindle much needed inflation.
• In the short run, the political environment in the Middle East is likely to remain fragile, according to the authors. Oil prices may continue on a volatile path until the political climate stabilizes. Given the influence of the region on the global economic recovery, developments in the Middle East and North Africa will be monitored closely by the rest of the world.

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