Riyadh, Saudi Arabia – The International Monetary Fund (IMF) has raised concerns about the economic repercussions of the ongoing conflict between Israel and Hamas on neighboring countries. Speaking at the Future Investment Initiative (FII) in Riyadh, IMF Managing Director Kristalina Georgieva highlighted the visible economic strains on countries in the vicinity of the conflict.
Georgieva emphasized the economic challenges faced by nations like Egypt, Lebanon, and Jordan, which are already experiencing the effects of the conflict. The economic consequences of the hostilities are a growing concern for these neighboring states.
The conflict escalated when the Palestinian militant group, Hamas, launched a surprise attack on Israel on October 7, resulting in more than 1,400 casualties and 222 hostages, as reported by Israeli authorities. In response, Israel initiated a series of intensive air strikes and imposed a comprehensive blockade on Gaza, where the Hamas-led health ministry reported a death toll of 5,791.
At the FII event, Georgieva voiced her apprehension about the potential global economic impact if the conflict further escalates or drags in other countries. The managing director cited various factors contributing to economic uncertainty, including decreased tourism, hesitancy among investors, rising insurance costs, and increased risks related to refugees in countries already dealing with substantial migration challenges.
The annual FII gathering, often likened to “Davos in the Desert,” traditionally serves as a platform for Saudi Arabia to highlight domestic economic reforms. However, the success of these reforms is perceived to be closely linked to regional stability. The ongoing conflict between Israel and Hamas, with its potential economic ramifications on neighboring nations, underscores the importance of such stability for the region’s economic prospects.