IMF Chief Welcomes US-Iran Ceasefire, Warns Energy Recovery Will Take Time
IMF chief Kristalina Georgieva welcomed the US-Iran ceasefire but warned energy recovery would be slow due to infrastructure damage. The Fund will update its global growth projections on July 8, having previously downgraded them due to the war's impact, which disproportionately affects energy-importing nations and Gulf oil exporters.
IMF chief Kristalina Georgieva welcomed the ceasefire agreement between the United States and Iran, but warned that energy and supply disruptions would take time to dissipate due to significant infrastructure damage. The US and Iran announced the deal Sunday to end the Middle East war and reopen the Strait of Hormuz.
Georgieva announced the Fund will release an updated World Economic Outlook (WEO) on July 8. The IMF previously downgraded global growth projections in April due to the war, with a severe scenario showing global growth falling to 2% and inflation spiking above 6%. She reiterated a «clear risk to global growth» from the conflict, noting significant disparities in impacts, particularly on energy-import reliant countries with limited policy space, such as those in Africa experiencing fuel shortages.
Emerging market economies in Asia have also seen gasoline retail prices increase by 40% since the war began. Georgieva stated the Fund is ready to offer financial support, though most governments have sought policy guidance. Oil-exporting Gulf countries face steep downward revisions to growth this year, with five out of eight countries projected to see contractions.