WASHINGTON (EFE).— La managing director of the International Monetary Fund, Kristalina Georgievastressed yesterday that If the war in Iran persists and inflation continues to rise globally, everyone must prepare to face “difficult times.”
“If the conflict persists and all prices remain high for a prolonged period, we must prepare for difficult times,” Georgieva said in a press conference on the third day of the spring meetings of the IMF and the World Bank Group (BM) en Washington.
Georgieva noted that the impact of the war on the world economy “is already considerable, even if the conflict turns out to be ephemeral” due to the extensive damage suffered by hydrocarbon-producing infrastructure in Middle East.
Likewise, due to interruptions in supply chains due to the closure of the Strait of Hormuz, which are driving up prices and slowing global growth.
In that sense, he recalled that the new report of Global Economic Outlook (WEO) published on Tuesday by the entity reflected a cut in global growth forecasts of at least two tenths for this year.
“We are concerned about the physical breakdown in supply chains that we are already observing, especially in Asia, a region highly dependent on imports from the (Persian) Gulf,” said the Bulgarian economist.
“Shortage situations are occurring, not only of oil and gas, but also of gasoline or helium, which are already generating certain disruptions. And we must recognize that this situation will not dissipate overnight, not even if the war ended tomorrow,” Georgieva argued, pointing out that cargo ships are a very slow means of transportation.
The managing director once again insisted on the asymmetric effects of the conflict, with Middle East and many emerging economies highly dependent on much more exposed energy exports, and underlined at the same time the bad moment in terms of fiscal consolidation in which the war against Iran has broken out, as reflected in the Fiscal Monitor published yesterday by the IMF.
Also, he insisted on central banks to remain very attentive to the evolution of prices and not to rush with the tightening of monetary policies. Likewise, he urged not to neglect long-term structural reforms, including those that affect the demographic and climate crisis, trade or artificial intelligence.
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