Israel and Hamas at war | “New cloud” over the global economy

(Marrakech) The consequences of the unprecedented Hamas attack in Israel add “a new cloud to an already bleak horizon for the world economy,” said Thursday the Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva. , during a press conference in Marrakech.

“Who pays the price” for the Hamas attack and the strikes carried out by the Israeli army in response, asked M^me Georgieva, “it’s all about the innocent,” adding that it’s “heartbreaking to see innocent civilians die.”

From an economic point of view, however, it is difficult to measure the impacts, recalled the Managing Director, but the IMF is “monitoring the situation very closely” and its possible consequences.

“We have seen some reactions on the oil market, but it is too early to say more, we see increases and decreases one after the other,” she said.

But the new strong tensions in the Middle East come on top of the “severe shocks” that the world economy must face and which become “the new norm which further weakens a world already weakened by weak growth and the fragmentation of its economy », insisted M^me Georgieva.

Therefore, the head of the IMF invites countries to “reestablish budgetary rules in order to be able to respond to future shocks and make the necessary investments” after a period of repeated shocks, between the COVID-19 pandemic, rising inflation and the conflict in Ukraine which led to “a period of increased public spending”.

A return to budgetary discipline in a complex economic context, recognizes M^me Georgieva since “we do not have the growth we need to recover from the impacts of shocks and provide the opportunities for people to see their lives improve.”

Faced with a geopolitical and economic situation that remains tense, the Fund needs “more flexibility in order to better anticipate shocks and provide a rapid response”.

“We must determine the nature of the crisis very quickly, provide debt relief for the poorest countries and come very quickly with emergency financing,” she detailed.

But Kristalina Georgieva also reminded us: “we must cooperate, because otherwise the world will be in real difficulty, particularly with regard to global warming. We must find, pragmatically, a path to cooperation.”