On Wednesday, the New York Times reported that according to a top economist at Ernst & Young, if the current conflict between Israel and Hamas were to escalate, the global economy could end up taking on major damage.

Gregory Daco, chief economist at EY-Parthenon, Ernst & Young’s global strategy consulting arm, said in an interview with the New York Times that a “worst-case scenario,” such as an expansion of the military action in the Middle East, there would be “severe” consequences for the world economy, including a possible moderate recession, a plunge in the prices of equities, and a loss globally of $2 trillion.

In addition, Daco predicted that oil prices would rise from their current $85 per barrel to as much as $150 per barrel.

In another report last month, the World Trade Organization (WTO) said that if the world were to divide into two trading blocs as a result of the conflict between Israel and Hamas escalating, the global GDP could contract by as much as 5% over the longer term. In addition the WTO downgraded its global trade growth forecast for 2023 from the previously estimated 1.7% to 0.8%, attributing the fall to a deepening slowdown in manufacturing.