Kristalina Georgieva, Director of the International Monetary Fund, warned that the raging war in the Middle East caused a major global economic shock, leading to the disruption of about 13% of oil supplies and 20% of gas that were supposed to reach global markets. She stressed that the repercussions of the crisis will continue through 2026, even if a ceasefire is reached.
Georgieva’s statements came during an interview with the American CBS News network, where she explained that this earthquake is of a global and uneven nature, as its effects vary from one country to another depending on its proximity to the conflict, its dependence on energy imports, and its financial ability to absorb shocks.
Broad implications for Asia and supply chains
Georgieva noted that many Asian countries were most affected, as South Korea resorted to rationalizing energy consumption, while India imposed rationing measures, the Philippines declared a national emergency in the energy sector, while Australia faced a fuel shortage.
She also pointed out that the shortage of helium coming from Qatar has affected vital industries such as semiconductors and medical devices, in addition to the decline in fertilizer supplies, which threatens to raise global food prices.
She warned that financial transfers from the Gulf countries to countries such as India and Bangladesh would be affected, in addition to the damage to the tourism sector, especially in Sri Lanka, where a third of its flights pass through the Gulf region.
Georgieva explained that the United States is considered the least affected by the crisis compared to other countries, given that it is an energy exporter, but the rise in prices affects inflation and delays its return to target levels, which constitutes an additional burden on low-income people, and represents something like an indirect “tax” on their incomes.
Infrastructure damage prolongs the crisis
The Fund Director confirmed that the effects of the crisis “have become a reality,” noting that 72 energy facilities have been exposed to damage, a third of which is severe, which will lead to continued pressure on supplies.
She pointed out that restoring the full production capacity of some fields, such as a gas field in Qatar, may take between three to five years, and that refineries stopping work due to a lack of supplies requires time to restart.
Prices will not quickly return to pre-war levels
Georgieva stressed that energy prices will not quickly return to their previous levels, even if a peace agreement is reached, due to the cumulative effects on supply chains and infrastructure, expecting that pressure on fuel prices and airline tickets will continue during the coming period.
International Monetary Fund recommendations
Regarding the role of the International Monetary Fund, Georgieva explained that the Fund focuses on providing advice to countries to avoid imposing restrictions on trade in petroleum products, as this has negative effects on global prices.
It also recommended providing targeted and temporary financial support to the most affected groups, in light of the limited financial space and high levels of global debt.
The resilience of the global economy despite shocks
Despite the challenges, Georgieva stressed that the global economy has shown a remarkable degree of flexibility, thanks to the role of the private sector, the improvement of economic foundations in many countries, in addition to technological innovation.
However, it indicated that previous expectations of improved global growth in 2026 may witness a reduction, depending on the duration of the conflict and the speed of production recovery.
The dollar and the trade war
She also stressed that the US dollar still maintains its position as a major reserve currency, as the assets denominated in it represent about 75% of global financial assets, despite the increasing trend towards diversifying reserves.
At the same time, Georgieva stressed that trade wars are “no winners,” calling for an easing of tensions between the United States and China.
Warnings about artificial intelligence and cyber risks
In a related context, Georgieva warned of the increasing effects of artificial intelligence on the labor market, noting that one in ten jobs in the United States requires new skills, with a decline in medium-skilled jobs, which may lead to a widening of the inequality gap.
Georgieva expressed her concern about cyber risks that may threaten global financial stability, calling for strengthening international cooperation and developing effective regulatory frameworks.
The Director of the International Monetary Fund stressed that the world is facing “turbulent waters,” stressing that international cooperation and strengthening the role of multilateral institutions represent two essential elements for maintaining global economic stability in light of the increasing challenges.
