The spectre of a wider conflict in the Middle East poses a fresh threat to the global economy just as the world emerges from shocks triggered by Covid-19 and the Ukraine war, finance ministers and officials have warned.Broader regional tensions would have significant economic ramifications, they said, as they rounded off meetings of the IMF and World Bank in Morocco this week. The biannual events took place as Israel declared war on Hamas and launched a major bombardment of the Gaza Strip.
“If we are facing any escalation or extension of the conflict to the whole region we will face big consequences,” Bruno Le Maire, France’s finance minister, told the Financial Times, adding that risks ranged from higher energy prices stirring inflation, to a decline in confidence.
Kristalina Georgieva, the head of the IMF, warned of a “new cloud on not the sunniest horizon for the global economy”, encapsulating fears among the delegates in Marrakech that the medium-term prospects for the global economy are lukewarm.