The rocket strike on the Israeli-occupied Golan Heights over the weekend has heightened fears of a full-blown conflict between Israel and Hezbollah in Lebanon. For Israel, this risks adding to pressure on its already strained public finances, and would increase the possibility of a more lasting hit to economic activity. For Lebanon, a war would risk deepening its crisis even further. The spillovers for the global economy of a full-scale conflict on the Israel-Lebanon border would be limited, but upside risks for commodity prices would rise if the war were to spread, particularly if Iran became involved.
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