IMF alert on serious economic risks due to conflict in the Middle East

Washington. The International Monetary Fund said an escalation of conflict in the Middle East could have major economic ramifications for the region and the global economy, although commodity prices remain below last year’s highs.

IMF spokesperson Julie Ko-zack indicated in a press conference that the global lender, based in Washington, is closely following the situation in southern Lebanon with great concern and offered his condolences for the loss of human life.

The possibility of a new escalation of the conflict increases risks and uncertainty, and could have significant economic repercussions in the region and beyond.Kozack declared.

He added that it is too early to predict specific repercussions on the global economy, but noted that the region has already suffered a lot, especially Palestine, which has been totally devastated.

In the case of Gaza, he said, the civilian population faces dire socioeconomic conditions, a humanitarian crisis and insufficient aid deliveries.

The IMF estimates that Gaza’s gross domestic product (GDP) fell by 86 percent in the first half of 2024, while the West Bank’s GDP in the first half probably fell by 25 percent, with prospects for further deterioration.

Israel also suffers economic consequences from the conflict, which sharply reduced tourism in the region, and mobilized a good part of its workforce, with a 20 percent drop in its GDP in the last quarter compared to the last quarter of 2023. .

The extension of the conflict to Lebanon reinforces risks and uncertainty and could have important consequences in the region and beyondwarned the spokesperson.

The IMF will update its economic projections for all countries and the global economy at the end of October, when the global lender and the World Bank hold their fall meetings.

In Lebanon, the recent escalation of the conflict is exacerbating the country’s already fragile macroeconomic and social situationKozack said, referring to Israel’s airstrikes.