'Dr. Doom' Professor Rubini: "If Iran Intervenes, Stagflation Will Occur"

'Dr. Doom' Nouriel Roubini, a professor at New York University in the United States, said that if Iran and Lebanon intervene in the war between Israel and the Palestinian armed group Hamas, oil prices could surge, leading to stagflation (economic stagnation amid high inflation).

Nuriel Rubini

Professor Roubini warned in an interview with Bloomberg on the 12th (local time) in Marrakesh, Morocco, where the International Monetary Fund (IMF) and World Bank (WB) annual meetings were held, that the global financial market is "underestimating the risk of a large-scale conflict across the Middle East."

He explained, "Investors expect that Israel has no choice but to enter Gaza and eliminate Hamas," adding, "The market is pricing in a basic scenario where 'if Israel occupies Gaza, the situation will worsen but the conflict remains contained.'"

However, Professor Roubini predicted that if the "adverse scenario" materializes, where Iran and Lebanon intervene in this conflict and increase the risk of a clash between Israel and Iran, "oil supply from the Gulf (Persian Gulf) will inevitably be disrupted, causing oil prices to surge and the economic shock to be enormous."

He said that if oil prices rise, "the shock of stagflation" will occur and "it will pose a tremendous dilemma for central banks."

Stagflation is an economic disaster that is very difficult to overcome, characterized by a rapid and sustained rise in prices alongside an economic downturn.

Professor Roubini is called 'Dr. Doom' due to his pessimistic economic forecasts. He gained worldwide attention by accurately predicting the scenario of the global financial crisis triggered by the 2008 U.S. subprime mortgage crisis.

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