Gaza war impact on Egypt and neighbors “already visible,” IMF chief Georgieva

Cairo – October 25, 2023: As the war on Gaza continues into its third week, the International Monetary Fund’s Managing Director, Kristalina Georgieva shared that for the area’s neighboring countries - Egypt, Lebanon, and Jordan – “the channels of impact are already visible”.

The war has caused additional jitters in an “already anxious world,” explained the IMF head on stage at the Future Investment Initiative (FII) in Riyadh, KSA, on Wednesday.

Georgieva stressed that the IMF was “concerned first and foremost about the epicenter of the war, the tragic loss of lives, but also the destruction and the reduction of economic activity,” and that cooperation in a fragmented world is vital for growth and is “truly a matter of the highest priority”.

Highlighting the possible impact on tourism-dependent countries, Georgieva stressed that the uncertainty was a “killer” for tourist revenue inflows.

“Investors are going to be shy to go to that place, [while the] cost of insurance, if you want to move goods, [will] go up,” she added.

The IMF head underscored that the war is happening at a time when “growth is slow, interest rates are high, [and] the cost of servicing debt has gone up”.

"Inflation is still high and that requires interest rates to remain high, throwing more cold water on growth" that is already slow at 3%, she explained. “And now that we are here, our call to everybody is to buckle up [and] make sure that you understand that higher interest rates are here for longer,” she added.

The IMF’s next update on its forecast for global and regional economies is scheduled to be released between December and January and will reflect the impact of the now three-week war.