Israel-Hamas war affecting regional economies, warns IMF head

Kristalina Georgieva said the war on Gaza has caused ‘more jitters’ in an already anxious world. The war between Israel and Hamas is already affecting the region’s economies, the managing director of the International Monetary Fund (IMF) has warned.

“You look at the neighbouring countries – Egypt, Lebanon, Jordan – there the channels of impact are already visible,” Kristalina Georgieva said at the Future Investment Initiative (FII) in Saudi Arabia’s capital Riyadh on Wednesday.

The IMF is concerned about the tragic loss of life in the epicentre of the war, but also the destruction and reduction of economic activity as a result of the raging conflict, she said.

“What is happening in the Middle East is happening at a time when growth is slow and interest rates are high and cost of servicing debt has gone up because of COVID and war,” the IMF chief added.

Georgieva spoke a day after Wall Street titans told the forum that the war could deal a heavy blow to the global economy, especially if it draws in other countries.

“What we see is more jitters in what has already been an anxious world,” Georgieva said.

“You have tourism-dependent countries – uncertainty is a killer for tourist inflows,” she said, describing the potential economic cost for countries in the region before listing specific risks.

“Investors are going to be shy to go to that place. Cost of insurance – if you want to move goods, they go up. Risks of even more refugees in countries that are already accepting more.”

According to Al Jazeera News.