DUBAI – Executive Director of the International Monetary Fund (IMF) Kristalina Georgieva said the impact of the conflict, economically speaking, has been devastating in Gaza, where activity dropped 80 per cent from October through December compared with a year earlier—and in the West Bank, where the drop was 22 per cent.
The Palestinian economy’s dire outlook is worsening as the conflict persists—only a durable peace and political solution will fundamentally change it, Georgieva said at her word at the Arab Financial Forum in Dubai.
The IMF will continue to provide policy advice and technical assistance to the Palestinian Authority and Palestinian Monetary Authority, she promised.
“Looking at neighboring economies, the conflict is weighing on tourism, a lifeline for many. We are closely watching the fiscal impacts, which could be seen in areas such as higher spending on social safety nets and defense”, she said.
“Across the region and beyond, the impact is felt through rising freight costs and reduced Red Sea transit volumes—down by nearly 50 per cent this year in our PortWatch data”, she added.
“This exceptionally uncertain moment compounds the challenges of economies that are still recovering from previous shocks. And further widening of the conflict would aggravate the economic harm.”
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