THE International Monetary Fund chief on Tuesday compared the global economy to a “storm-tossed vessel,” caught between high inflation, debt and trade wars while driven by tailwinds from the AI revolution.
Kristalina Georgieva told journalists in Washington that the global economy had so far “weathered the energy shock caused by the closure of the Strait of Hormuz better than we feared.”
Worldwide energy prices have skyrocketed since the United States and Israel launched their war on Iran, engulfing the Middle East in violence as Tehran’s retaliatory action targeted US allies and blocked the vital Strait of Hormuz.
In July, the IMF cut its global growth projection for the second time this year, flagging “uncertainty and risks” related to the war in the Middle East.
Global economic growth is estimated at 3.0 per cent this year, the IMF said in its update to its World Economic Outlook at the time, down from 3.1 per cent in its April forecast.
Georgieva on Tuesday said the impact of the war had been “asymmetric”, based on countries’ exposure to Gulf oil imports and their overall macroeconomic stability.
AFP
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