MARRAKESH: The war between Israel and Hamas has cast a shadow over the IMF/World Bank annual meeting in Morocco, with warnings on Thursday clouding the already sluggish global economic outlook. Ta.
The global financial institution will hold a meeting of finance ministers and central bankers from around the world in an Arab country for the first time in 20 years.
The conflict, which erupted when Palestinian militant group Hamas launched a bloody attack on Israel from Gaza on Saturday, has raised concerns about its potential impact on the global economy.
At a press conference in Marrakech, IMF Managing Director Kristalina Georgieva said the International Monetary Fund would be monitoring very closely “how the situation develops” and what impact it has on the oil market. He said he is doing so.
He said it was “too early” to assess the impact of the conflict, but “this is not the brightest horizon for the global economy, but new clouds that are darkening this horizon.”
Georgieva noted that the IMF's World Economic Outlook, released earlier this week but drafted before the outbreak of conflict, already showed weak growth in the global economy.
The global economic recovery from the coronavirus pandemic has been hurt by Russia's invasion of Ukraine, rising inflation and high interest rates.
“Unfortunately, too many countries and communities are affected by natural disasters, and wars in Ukraine and now in the Middle East have caused tragic loss of civilian life and enormous damage,” Georgieva said. It's causing pain.”
“We mourn the victims,” she added.
“We have experienced a severe shock and it is now becoming the new normal for a world weakened by slowing growth and economic fragmentation.”
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The IMF kept its growth forecast for this year unchanged at 3.0%, but lowered its forecast for 2024 to 2.9%, warning that the economy was “moving slowly, not at full speed.”
The IMF's growth forecast for the Middle East and North Africa region this year has been lowered from 3.1% to 2.0%, but is expected to rebound to 3.4% in 2024.
“For several months now, the world economy has entered a difficult period due to the war in Ukraine, the conflict in Azerbaijan (and the horrific terrorist attack in Israel),” French Finance Minister Bruno Le Maire told reporters.
“Geopolitical risk is currently the most significant risk to the global economy,” Le Maire said.
The conflict between Hamas and Israel has left thousands dead and oil markets reeling from concerns that other countries could intervene and disrupt shipping in the Middle East.
Global oil prices have seesawed, surging at the start of the conflict before rising again on Thursday on concerns about supply flows.
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IMF chief economist Pierre-Olivier Grinchat said on Tuesday that IMF research shows that a 10% rise in oil prices could reduce global economic growth by 0.15 percentage points and raise inflation by 0.4 percentage points. Stated.
The International Energy Agency said Thursday that the risk of oil supply disruptions from the war is limited, but it stands ready to intervene in the market if necessary.
IMF Middle East and Central Asia Director Jihad Azour said oil prices remained lower than in September.
Azur said it was difficult to get a “clear read” on the economic impact of the conflict, but the situation was “major, it's seismic.”