Israel to negotiate with Lebanon, says Netanyahu, as attacks continue; ceasefire holds ahead of Pakistan peace talks; Strait of Hormuz remains closed
War is darkening the outlook for the world economy – whether or not a fragile ceasefire holds, the head of the International Monetary Fund warned this morning.
Managing Director Kristalina Georgieva said the fund will lower its forecasts for the world economy next week.
“If this shock had not happened, we would be increasing global growth,” Georgieva said ahead of next week’s IMF-World Bank meetings. “However, even our most promising scenario now involves a decline in growth,” he said.
The world economy had proven resilient in the face of Donald Trump’s decision to impose sweeping global tariffs last year. In January, the 191-nation IMF raised its global growth outlook to 3.3 percent and was poised to do so again when its new forecasts are released next Tuesday.
But the war changed everything. The conflict increased oil and gas prices; oil refineries, tanker terminals and other energy infrastructure were damaged; disruption of fertilizer shipments on which the world’s farmers depend; damaged the trust of businesses and consumers.
“Even if the new peace is permanent, growth will be slower,” Georgieva said.
He told policymakers to “be careful not to make things worse” with “stand-alone” actions such as restricting exports and imposing price controls. “Don’t pour gasoline on the fire,” he said.
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