Washington - (Saba):
The International Monetary Fund warned that the repercussions of the recent US strikes on Iran could extend beyond the energy sector, given the rising global uncertainty and their potential negative impact on economic growth.
“The most immediate impact so far is higher energy prices,” IMF Managing Director Kristalina Georgieva said on Monday. “Brent crude futures jumped 5.7% in early Asian trading to $81.40 a barrel, before retreating later.”
She added, “The IMF is closely monitoring developments,” warning that any further escalation could deteriorate growth prospects in major economies and possibly lead to a further downgrade of global growth forecasts.
The IMF lowered its global economic growth forecasts last April, citing the effects of what it described as the “restart” of global trade led by the United States, which contributed to the slowdown in global economic activity.
Although the Fund does not expect the global economy to enter a recession, rising levels of uncertainty could weaken growth momentum in the coming period.
Georgieva noted that the Fund is currently focusing on the repercussions of geopolitical tensions in the Middle East, particularly with regard to the increase in the "risk premium" for oil and gas, pointing to the possibility of disruptions to energy supply routes, which could exacerbate economic pressures.
Regarding the US economy, Georgieva expected inflation to continue its downward trend, which could open the way for the Federal Reserve to cut interest rates before the end of the year. However, she warned that increased market volatility could significantly harm the business sector, as uncertainty typically curbs investment and depresses consumer confidence.