The Israel-Hamas conflict, which erupted last Saturday, has claimed the lives of more than 2,800 people and caused widespread damage. The conflict has also disrupted trade and investment in the region.

The conflict is a “new cloud” on the global economic horizon, International Monetary Fund (IMF) managing director Kristalina Georgieva said.

Speaking at the IMF and World Bank annual meetings in Morocco, Georgieva said the conflict threatens to weaken a global economy further already experiencing tepid growth.

“We are closely monitoring how the situation evolves, how it is affecting, especially oil markets,” Georgieva said.

She said there have been fluctuations in oil prices and market reactions, but it is too early to predict the full economic impact.

“Very clearly, this is a new cloud on not the safest horizon for the world economy, a new cloud darkening this horizon,” Georgieva said at a news conference.

Georgieva’s comments come as the global economy is facing a number of challenges, including the ongoing war in Ukraine, high inflation, and rising interest rates. 

The IMF has downgraded its global growth forecast for this year and next, warning that the war in Ukraine is having a “severe impact” on the global economy.

Georgieva’s warning is a reminder that the Israel-Hamas conflict is not just a humanitarian crisis but a major economic risk. The conflict could further weaken the global economy and make recovering from the COVID-19 pandemic more difficult.

In a joint statement released on the occasion of the annual meeting, Georgieva, World Bank President Ajay Banga, Morocco’s Minister of Economy and Finance Nadia Fettah, and Bank Al‑Maghrib Governor Abdellatif Jouahri warned of several significant other risks facing the global economy.

“Our understanding of the major risks and disruptive forces facing the global economy has evolved: the existential threat posed by climate change, growing disparities in income and opportunity, and geopolitical tensions are intensifying. Rapid digitalization and technological transformations create new challenges, but also opportunities and no country should be left behind.”