IMF chief Kristalina Georgieva stated on Thursday that the war between Israel and Hamas has cast a shadow over a global economy that was already struggling with sluggish growth.
Georgieva stated, “We are closely monitoring how the situation evolves, how it is affecting, especially oil markets,” while speaking at the IMF-World Bank annual meetings in Marrakesh, Morocco. Although there had been some alterations in oil prices and market movements, she stated that it was still too early to determine the implications for the economy.
“We are experiencing severe shocks that are now becoming the new normal for a world that is weakened by weak growth and economic fragmentation,” she stated during a press conference at the IMF and World Bank annual meetings in Marrakech, Morocco. “Very clearly, this is a new cloud on not the safest horizon for the world economy, a new cloud darkening this horizon,” she added.
The rapid escalation of violence in the prolonged Israeli-Palestinian conflict, which has already killed more than 2,500 lives, raised concern from Georgieva and a rising number of other financial leaders. This shook the oil markets amid concerns that other countries may step in and perhaps disrupt Middle Eastern oil shipments.
According to IMF analysis, a 10% increase in oil prices may reduce global growth by 0.15 percentage points and raise inflation by 0.4 percentage points, as stated by IMF chief economist Pierre-Olivier Gourinchas on Tuesday.
The International Energy Agency stated on Thursday that there is a limited chance that the war will disrupt the oil supply, but if necessary, it stands ready to step in.
Oil prices remain lower than they were in September, according to Jihad Azour, director of the IMF’s Middle East and Central Asia section. Azour stated that although it may be difficult to get a “clear reading” of the impact of the war on the economy, the situation is “big, it’s an earthquake.”
In retaliation for the deadliest attack on Jewish citizens since the Holocaust, whereby hundreds of gunmen stormed into Israeli towns on Saturday, Israel has pledged to annihilate the Hamas movement that dominates the Gaza Strip.
After the Red Cross pleaded for fuel to be allowed in to stop overburdened hospitals from “turning into morgues,” Israel declared on Thursday that there would be no humanitarian relief in its siege of the Gaza Strip until all hostages held by Hamas were liberated.
“It’s heartbreaking to see innocent civilians dying. Who pays the price? It is the innocent who pay the price,” Georgieva told reporters, visibly upset.
She urged nations to avoid intensifying the conflict and focus on areas where they could cooperate. “We do need to build our agility in terms of anticipating shocks and being quick to respond,” she stated.
Any regional escalation of the conflict, according to French Finance Minister Bruno Le Maire, would have “problematic economic consequences” for oil prices and overall world expansion.
- Published By Team Genuine Reporter