IMF, World Bank Warn Gaza War, Red Sea Attacks Threatening Global Economy

Mon Feb 12 2024
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DUBAI: The International Monetary Fund (IMF) and World Bank on Monday warned that the ongoing Gaza war and the related attacks on shipping through the Red Sea pose threats to the global economy.

Managing Director of the IMF, Kristalina Georgieva, underscored the severe economic consequences of the protracted conflict in Gaza, which has already taken a toll on the economies of the Middle East and North Africa region. Speaking at the World Governments Summit in Dubai, Georgieva expressed concern over the potential escalation of the conflict, emphasizing the heightened risk of spillover effects.

Georgieva particularly highlighted the risk posed to the Suez Canal, a critical maritime passage, as Yemen’s Houthis continue to target Red Sea shipping. These attacks have disrupted commercial traffic and forced cargo carriers to seek alternative, longer routes, resulting in increased costs and delays.

The IMF managing director emphasized the need for urgent resolution to the conflict, acknowledging the broader ramifications for global stability. She personally appealed for peace, expressing her hopes for a peaceful resolution to the conflict.

Meanwhile, World Bank President Ajay Banga echoed Georgieva’s concerns, citing the Gaza war and Red Sea attacks as key challenges to the global economic outlook. Banga underscored the importance of closely monitoring these developments, particularly in light of the already subdued global growth rates.

Both IMF and World Bank officials expressed cautious optimism regarding the overall trajectory of the world economy. However, they stressed the importance of addressing the ongoing conflicts and challenges to ensure a stable and sustainable economic recovery.

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