IMF Warns of Global Economic Slowdown Amid Escalating Conflict in West Asia

Kathmandu. The International Monetary Fund (IMF) has recently warned of a decline in global economic growth. The primary cause is the ongoing conflict in the West Asia region, which is exerting severe economic pressure worldwide. The IMF chief has stated that there is little possibility of the situation returning to normalcy easily once the conflict subsides.

Factors such as the rapid rise in energy prices, damage to infrastructure like roads and industries, disruptions in supply chains, and a decline in market confidence have significantly impacted global economic growth.

The organization has indicated that immediate and substantial financial assistance is required to support countries affected by the conflict. Estimates suggest that aid ranging from $20 billion to $50 billion may be necessary.

Furthermore, a food crisis is also looming, with the potential to affect at least 4.5 million people. Poor and energy-importing nations are expected to be the most severely impacted by this crisis.

Meanwhile, the World Bank President stated that up to $25 billion could be made available to developing countries in the short term, with plans for long-term assistance reaching up to $60 billion. The conflict has driven up oil prices as critical maritime routes are blocked, reducing global supply.

Consequently, global inflation is also expected to rise. Increased costs for oil, gas, and fertilizers will make food production more expensive, further driving up food prices.

This will exacerbate the risk of famine in poorer nations. According to the institution, the output of countries involved in conflict initially drops by approximately 3 percent, with effects persisting for a long duration.