International Monetary Fund (IMF) Managing Director Kristalina Georgieva made statements regarding the global economy following the war in Gaza.
Stating that the war is a new factor worsening the outlook for the global economy but that it is too early to make a clear assessment, Georgieva said, ''The IMF is monitoring the economic effects of the war in Gaza very closely. The global economy is experiencing severe shocks that have now become the 'new normal.' We are facing a deepening fragmentation in the global economy''.
'IT COULD HIT BANKS AND NON-BANK INSTITUTIONS'
Key highlights from Georgieva's speech are as follows:
- Inflation has fallen but is still above target levels in many countries, so interest rates will need to remain high for longer.
- Further tightening of financial conditions could hit banks and non-bank institutions.
- We need to increase medium-term growth; the growth we need to recover from the effects of various shocks is not currently present.
- Well-designed reforms could increase growth in some countries by up to 8 percent within four years.
News Source: Reuters
