Middle East Growth to Slow in 2024 on Gaza Conflict: IMF Chief

Sun Feb 11 2024
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DUBAI: The International Monetary Fund (IMF) said on Sunday that Middle East economies were lagging below growth projections due to the Israel-Gaza conflict, even as the international economic outlook remained resilient.

IMF managing director Kristalina Georgieva told the Arab Fiscal Forum in Dubai that despite uncertainties, the global economy has been surprisingly resilient. She warned of a potential wider impact on regional economies of continued war in Gaza.

In a regional economic report in January, the IMF revised its GDP growth forecast for the Middle East and North Africa down to 2.9 percent this year, lagging below October projections due to the war in Gaza.

IMF Forecasts Higher Global Economic Growth

Last month, the IMF edged its forecast for international economic growth higher, upgrading the outlook for both the United States (US) and China and citing faster-than-expected easing of inflation.

Georgieva said economies neighboring Israel and the Palestinian territories witnessed the conflict weighing on tourism revenues, while Red Sea strikes weighed on freight costs internationally.

She told the forum on the sidelines of the World Governments Summit that those factors compounded the challenges of economies that are still recovering from previous shocks.

Houthis in Yemen have been targeting commercial ships with drones and missiles in the Red Sea since mid-November and say their strikes are in solidarity with Palestinians as Israel attacks Gaza. However, the United States and its allies characterize them as indiscriminate and a menace to international trade.

Several global shipping companies have been diverting traffic to the Cape of Good Hope, a longer route than through the Suez Canal of Egypt.

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