'Israel-Palestine war is a dark cloud for world economy', says IMF chief

International Monetary Fund Managing Director Kristalina Georgieva on Thursday said the Israel-Palestine conflict has darkened the horizon for the world economy that was already going through a phase of weak growth.

Georgieva said the International Monetary Fund was “very closely monitoring how the situation evolves” and how it is affecting the oil markets.

"Very clearly, this is a new cloud on not the safest horizon for the world economy, a new cloud darkening this horizon, and of course, not needed," she told a news conference at the annual meetings of the IMF and World Bank in Marrakech, Morocco.

She said there had been some fluctuations in oil prices and reactions in markets but it was too early to predict the economic impact.

“We are experiencing severe shocks that are now becoming the new normal for a world that is weakened by weak growth and economic fragmentation,” she said at the news conference.

“Very clearly, this is a new cloud on not the sunniest horizon for the world economy, a new cloud, darkening this horizon,” she remarked.

The IMF has kept its global growth forecast a 3 per cent for this year but lowered it to 2.9 per cent for 2024.

The weekend attack by Palestinian militant group Hamas on Israel from Gaza has left hundreds dead and rattled the oil markets and triggered fears that it spread into wider geopolitical conflict involving the US and Iran which could disrupt oil shipments in the Middle East.