Saudi Finance Minister: Ukraine War, Gaza Crisis, Red Sea Disruptions Impacting Global Economy

Ongoing geopolitical tensions, including the war in Ukraine and crises in Gaza and the Red Sea, pose significant challenges to the global economy's recovery, requiring international cooperation to build resilience and achieve sustainable growth.

Hadeel Hashem
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Saudi Finance Minister: Ukraine War, Gaza Crisis, Red Sea Disruptions Impacting Global Economy

Saudi Finance Minister: Ukraine War, Gaza Crisis, Red Sea Disruptions Impacting Global Economy

During a joint press conference with IMF Managing Director Kristalina Georgieva following the 49th meeting of the IMFC in Washington, Saudi Finance Minister Mohammed Al-Jadaan stated that the ongoing war in Ukraine, the humanitarian crisis in Gaza, and shipping disruptions in the Red Sea are having significant implications for the global economy. Despite the global economy being in a better position than expected a year ago, these geopolitical events continue to pose challenges.

Al-Jadaan, who serves as the Chairman of the International Monetary and Finance Committee (IMFC), acknowledged that while the IMFC is not the appropriate forum to resolve these geopolitical and security issues, their impacts on the global economy cannot be ignored. "The war in Ukraine, the crisis in Gaza, and the obstruction of shipping in the Red Sea have repercussions on the global economy," Al-Jadaan said.

The IMFC meeting concentrated on policy priorities to achieve price stability, strengthen fiscal sustainability, and safeguard financial stability while promoting inclusive and sustainable growth. The committee emphasized the importance of international cooperation to improve the resilience of the global economy and the international monetary system.

Why this matters: The ongoing geopolitical tensions and conflicts in various regions of the world continue to have far-reaching consequences for the global economy. As countries work towards post-pandemic recovery, addressing these challenges and fostering international cooperation will be crucial for achieving sustainable and inclusive growth.

IMF Managing Director Kristalina Georgieva stressed the need to build more resilience in the world economy and urged countries to continue taming inflation and rebuilding fiscal buffers. The IMFC expressed its deep appreciation to Nadia Calviño for her leadership as the previous IMFC chair and welcomed Al-Jadaan as the new chair.

Despite the challenges posed by geopolitical events, Al-Jadaan noted that the global economy appears to be heading towards a 'soft landing,' with economic activity proving more resilient than expected in many parts of the world. However, he cautioned that ongoing conflicts continue to burden the global economy, leading to some weak growth prospects in the medium term.

Key Takeaways

  • Ongoing conflicts in Ukraine, Gaza, and Red Sea disrupt global economy.
  • IMFC focuses on price stability, fiscal sustainability, and financial stability.
  • IMF urges countries to tame inflation and rebuild fiscal buffers.
  • Global economy heading towards 'soft landing' but conflicts burden growth.
  • International cooperation crucial for sustainable and inclusive recovery.