Israel-Hamas conflict could darken the global economy - IMF MD

The Managing Director of the International Monetary Fund (IMF) Kristalina Georgieva, has said the escalating conflict between Israel and Palestine is a new cloud darkening the global economy.

She stated during a news conference at the ongoing World Bank/IMF summit in Marakesh, Morocco.

She said: “In terms of economic impact, we are very closely monitoring how the situation evolves, how it is affecting especially oil markets.”
“It is too early to say, we have seen some ups and downs in oil prices, and we have some reactions on markets.”
“And as I said, we will be closely monitoring this.”

“Very clearly this is a new cloud on not the sunniest horizon of the world economy.”

“New cloud darkening this horizon,” Georgieva said.

Recent clashes between Israel and Hamas

Israel has declared its determination to eradicate the Hamas movement, which governs the Gaza Strip, in retaliation for the deadliest attack on Jews since the Holocaust.

Hundreds of gunmen breached the barrier fence and rampaged through Israeli towns on Saturday.

Since Saturday, the Israeli death toll has climbed to over 1,300 people. Many of them were civilians killed in their homes, on the streets, or at social gatherings.

Additionally, numerous Israeli and foreign hostages were taken back to Gaza.

The extent of the killings has come to light in recent days as Israeli forces regained control of towns, revealing homes strewn with bodies, including women who were raped and killed, and children who were shot and burned.

Israel’s response has included placing the enclave, which is home to 2.3 million people, under total siege and conducting the most powerful bombing campaign in the 75-year history of the Israeli-Palestinian conflict, destroying entire neighbourhoods.

Gaza authorities have reported that over 1,200 people have been killed, and more than 5,000 people have been wounded in the bombings.

The only electric power station has been shut down, and hospitals are running out of fuel for emergency generators.

Impact on the global economy

While there hasn’t been much impact on the global economy, analysts believe an escalation of the conflict could lead to an increase in crude oil prices.

Already, Chevron on Tuesday announced a halt in natural gas export via the East Mediterranean Gas (EMG) pipeline between Israel and Egypt over the violence in Southern Israel.

Natural gas exports will now move through the FAJR pipeline which links Jordan and Egypt.