IMF chief Kristalina Georgieva said on Thursday that the war between Israel and Hamas has darkened the horizon for a world economy that was already undergoing weak growth.
Speaking at the IMF-World Bank annual meetings in Marrakesh, Morocco, Georgieva said the International Monetary Fund was “very closely watching how the crisis evolves” and how it is impacting oil markets.
Georgieva stated that the IMF’s World Economic Outlook, which was released earlier this week but drafted before the war broke out, already showed weak global growth.
At a news conference, she said, “We are experiencing severe shocks that are now becoming the new normal for a world that is weakened by weak growth and eco-nomic fragmentation.”
She said it was “too early” to assess the impact of the conflict between Israel and the Palestinian militant group Hamas.
“Very clearly, this is a new cloud on not the sunniest horizon for the world economy — new cloud, darkening this horizon,” she added.
The IMF has kept its growth forecast a 3.0 percent for this year but lowered it to 2.9 percent for 2024, alerting that the economy is “limping along, not sprinting.”
The weekend attack by Palestinian militant group Hamas on Israel from Gaza has left thousands dead and rattled oil markets amid fears that other nations might intervene and possibly disrupt shipments in the Middle East.
Global oil prices jumped at the start of the conflict but have since eased as there was no immediate disruption to supply flows.
IMF chief economist Pierre-Olivier Gourinchas said on Tuesday that IMF research shows that a 10 percent increase in oil prices could weigh down on global growth by 0.15 percentage points and increase inflation by 0.4 percentage points.
The International Energy Agency said on Thursday the risk of oil supply disruptions due to the war is limited but that it stands ready to intervene in markets if necessary.
