The World Bank and IMF have warned of the potential threat to the global economy from the Gaza conflict and subsequent attacks on ships sailing in the Red Sea.
International Monetary Fund Managing Director Kristalina Georgieva said economies in the Middle East and North Africa have already been affected by the conflict between Israel and Hamas, which has been going on since October.
The longer the fighting goes on, the bigger the global impact could be, Georgieva warned at the annual World Government Summit in Dubai, which brings together political and business leaders.
“My biggest concern is that the conflict continues, because the longer the conflict continues, the greater the risk of spillover,” she said.
“We currently see a risk of leakage in the Suez Canal” as Yemen's Iranian-backed Houthi rebels attack ships in the Red Sea that connect to the vital shipping route, she said.
The Houthis say they are targeting Israeli-linked shipping in solidarity with Palestinians in the Gaza Strip, forcing some cargo carriers to take longer and more expensive routes to avoid attacks. There is.
The United Nations Conference on Trade and Development warned late last month that commercial traffic through the Suez Canal had fallen by more than 40% in the past two months.
“If there are other consequences regarding the course of the fighting, it could be even more problematic for the world as a whole,” Georgieva said.
On a personal note, she added: “As a woman, as a mother, as a grandmother.” I pray for peace. ”
The Gaza Strip has been under heavy Israeli attack for more than four months in retaliation for the October 7 Hamas attack on southern Israel.
Hamas' unprecedented attack killed about 1,160 people, most of them civilians, according to an AFP tally based on official Israeli statistics.
Israel has vowed to destroy the militant group, launching airstrikes and ground attacks that have killed at least 28,340 people, mostly women and children, according to the health ministry in Hamas-controlled areas.
Georgieva said that despite war-related uncertainties, the IMF is “very confident that the global economy is ready for the soft landing we have been dreaming of.”
“We expect interest rates to be in line with last year's inflation by mid-year,” he said in response to a question about interest rate cuts in major economies.
World Bank President Ajay Banga also spoke at the summit, saying, “It's not just what's happening in Gaza that matters, but also the challenges in Ukraine.” The Red Sea and the Red Sea is one of the biggest challenges to the global economic outlook.
“When you add these variables to what is already proving to be the lowest growth in probably the last 35 to 40 years, that is something we have to monitor closely,” he said.
(Information provided by AFP)
