IMF Warns of Middle East Conflict's Economic Threat

The International Monetary Fund warns that the escalated conflict in the Middle East could significantly impact regional and global economies. With southern Lebanon at the center of concerns, the IMF is closely monitoring developments. Gaza's GDP plummeted 86%, and Israel's has contracted by 20% due to the conflict.

The International Monetary Fund has announced that escalating conflict in the Middle East could pose significant economic challenges both regionally and globally. Though commodity prices remain below last year's peaks, the situation is closely monitored with grave concern, particularly in southern Lebanon, according to IMF spokesperson Julie Kozack.

Kozack highlighted Gaza's GDP suffered an 86% decrease in early 2024, while the West Bank's declined by 25%. Israel experienced a 20% GDP contraction in late 2023 due to the ongoing conflict. The IMF plans to release updated economic projections after upcoming fall meetings with the World Bank.

Lebanon's fragile socio-economic condition has worsened after intensified conflict linked to Israeli strikes on Hezbollah. Despite a 2022 loan agreement with the IMF, Lebanon's reform progress remains stalled. The IMF is ready to assist Lebanon once necessary actions and policy measures are met.

(With inputs from agencies.)