(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, Ms. Georgieva questioned, “is above all the innocent people,” adding that it is “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 high 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 Ms. 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 rising public spending.”
A return to budgetary discipline in a complex economic context, recognizes Ms. Georgieva since “we do not have the growth we need to recover from the impacts of shocks and provide the opportunities allowing 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 need to 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 need to find, pragmatically, a path to cooperation.”