La Jornada: The economic impact will continue, despite the US-Iran pact: IMF

Washington. The director of the International Monetary Fund (IMF), Kristalina Georgieva, welcomed the peace agreement reached between Tehran and Washington, although she warned that the repercussions of the conflict on the world’s energy supply will take time to dissipate.

Iran and the United States agreed on Sunday to end almost four months of a war that paralyzed the Strait of Hormuz, a key sea route for the transport of hydrocarbons.

“The sooner it is resolved, the better, especially since supplies will take time to recover given the significant damage to infrastructure” in the Gulf, Georgieva wrote in a note on the IMF website.

In this sense, “the announcement of the ceasefire on Sunday is welcome,” he added.

The Washington-based organization is due to update its World Economic Outlook (WEO) report on July 8.

In April, the agency lowered global growth projections due to the impact of the war. In the most serious scenario, he projected that global growth would fall to 2 percent and inflation would climb above 6 percent.

On Monday, Georgieva stressed that the world economy “seems to be resilient in general,” and said that its two engines, the United States and China, are registering solid dynamism.

He reiterated that the conflict remains “a clear risk to global growth” and noted significant disparities in its effects.

“Countries that combine heavy dependence on energy imports with limited policy room for maneuver are the most affected,” he said.

The tension is visible in Africa and emerging market economies in Asia have also been hit hard.