Julie Kozak, Director of Communications at the International Monetary Fund (IMF), commented on the global economic situation and the impact of the conflict in the Middle East during a briefing on the latest international developments.
Kozak said that the conflict has once again become a test of the resilience of the global economy, and reiterated that the IMF continues to assess developments through three main transmission channels: commodity prices, especially oil; the impact of the second round on inflation and inflation expectations; and financial conditions. She added that countries that are net importers of energy resources and have limited financial or foreign exchange reserves remain the most vulnerable to the economic consequences of rising energy prices.
Commodity markets are recovering, but it will take time to normalize.
Discussing recent events, according to Kozak, oil prices have fallen from recent highs and are now about 10 percent above pre-war levels. She added that prices for natural gas, aviation fuel, base metals, urea and some types of fertilizers have also decreased.
However, Kozack warned that full normalization of commodity markets will take time, as shipping routes and supply chains will need time to recover after the opening of the Strait of Hormuz as part of the memorandum of understanding between the United States and Iran to restore peace between the parties. According to Kozak, the prospects also depend on the duration of the current ceasefire.
The IMF will update its global forecast in July.
Kozak reported on inflation, expectations remain broadly stable despite recent shocks, although several central banks have tightened monetary policy, while others have kept interest rates unchanged. She added that financial conditions remain favorable, with relatively low sovereign spreads allowing many emerging and developing economies to continue to gain access to international capital markets.
The IMF will publish a comprehensive reassessment of the global economic outlook, including updated forecasts, in its July 8 issue of World Economic Outlook.
Author: SteelOrbis Editorial Team
Steelorbis.com
