RIYADH: The International Monetary Fund director affirmed that Saudi Arabia has succeeded in redirecting its oil export pathways, which has helped support global market stability and serve the world economy.
Kristalina Georgieva indicated that the war in the Middle East will lead to higher inflation rates and slower global growth, ahead of the release of new global economic forecasts expected next week.
The war has triggered the worst-ever disruption to global energy supplies, with millions of barrels of oil production shuttered due to Iran’s effective blockage of the Strait of Hormuz, which is crucial for shipping around one-fifth of the world’s oil and gas.
The armed conflict is expected to dominate discussions among finance officials from around the world at next week’s IMF-World Bank Spring Meetings in Washington.
In response to a question from Asharq, Georgieva said that Saudi Arabia has successfully redirected its oil exports, contributing to global market stability and supporting the global economy as well as its domestic economy.
She also expressed appreciation for the Gulf countries’ efforts in building diversified economies based on strong institutions and their ability to absorb economic shocks.
The IMF chief noted that the fund is moving toward slightly lowering its global growth forecasts, as well as those for Gulf Cooperation Council countries, given the repercussions of the current geopolitical situation.
Georgieva added that, were it not for the war, the IMF would have raised its global growth forecasts of 3.3 percent in 2026 and 3.2 percent in 2027, but current developments have pushed in the opposite direction, affirming that “all roads now lead to higher prices and slower growth.”
The war has reduced global oil supply by 13 percent, she said, with the impact rippling through oil and gas shipments and into related supply chains such as helium and fertilizers.
The top official explained that a quick end to the war could lead to a slight reduction in growth expectations with limited inflation increases, while a prolonged war would result in more severe impacts on both indicators.
The IMF director revealed that the fund has received requests from some countries for financial assistance, without disclosing their names, indicating that current lending programs could be enhanced to meet these needs.
Georgieva also clarified that there is currently no global food crisis, but this situation could change if fertilizer supply chains are affected, which would exacerbate price pressures globally.
The IMF is expected to release a range of scenarios in its upcoming World Economic Outlook due on April 14. It signaled a possible downgrade in a March 30 blog post, citing the asymmetric shock of the war and tighter financial conditions.
