The Managing Director of the International Monetary Fund, Kristalina Georgieva, has cautioned that the latest conflict in the Middle East could pose fresh risks to the global economy.
Speaking on Thursday during a livestream session of the Asia in 2050 Conference in Bangkok, Georgieva said the war was testing the resilience of the global economic system.
According to her, a prolonged conflict could have far-reaching economic consequences across the world.
“This conflict, if proven to be more prolonged, has obvious potential to affect global energy prices, market sentiment, growth, and inflation, and place new demands on the shoulders of policymakers everywhere,” Georgieva said.
The warning follows escalating tensions after the United States and Israel launched military strikes against Iran on Saturday. The attack reportedly killed Iran’s supreme leader and triggered retaliatory assaults across the Gulf region.
The fighting in the oil-rich area has already pushed global crude prices higher and unsettled international financial markets.
Georgieva noted that the global economy is increasingly exposed to unpredictable crises.
“We are in a world of more frequent, more unexpected shocks, and we have been warning our membership for quite some time that uncertainty is now the new normal,” she said. “We are potentially in a prolonged period of flux.”
She also highlighted concerns over energy supply, particularly for Asian countries that depend heavily on imports.
Energy security, she said, was “at stake” for much of Asia, noting that markets had fluctuated sharply “like a roller coaster over the last couple of days.”
“So the sooner we see the end of calamity, the better for the whole world,” Georgieva added.
