IMF Latest: Israel-Hamas War Dims Global Outlook, Georgieva Says

International Monetary Fund Managing Director Kristalina Georgieva said ongoing conflict after Hamas attacked Israel was a “a new cloud on not-the-sunniest horizon for the world economy.”

(Bloomberg) — International Monetary Fund Managing Director Kristalina Georgieva said ongoing conflict after Hamas attacked Israel was a “a new cloud on not-the-sunniest horizon for the world economy.”

“In terms of economic impact we are very closely monitoring how the situation evolves, how it is affecting especially oil markets,” she told a press conference Thursday in Marrakech, Morocco, during the annual meetings of the IMF and World Bank. 

The crisis is now top of mind as leaders of the world economy gather all week to discuss challenges that include poverty reduction, climate change and helping the poorest nations reduce crippling debt burdens. 

“Geopolitical risks are the most significant risk for the world economy now,” said French Finance Minister Bruno Le Maire, including “the most significant risk for growth, for development and for common prosperity.”

Europe’s Weak Economy Faces Inflation, Oil Risks, Gentiloni Says (10:40 a.m.)

Europe’s economy faces continued headwinds from inflation as well as the risk of an impact on oil prices from the conflict between Israel and Hamas, according to European Union Economy Commissioner Paolo Gentiloni.

“We have a weak economy, but we’re not in recession, and this is mixed news,” he said in a Bloomberg Television interview in Marrakesh. “If we think to what we were expecting one year ago, we were expecting a worse situation than the one we’re in.” 

IMF Working With Egypt to Set Dates for Mission: Georgieva (09:38 a.m.)

IMF is focused on making sure Egypt succeeds, Georgieva says in briefing in Marrakech.

“Our discussions are very much focused on making sure that Egypt succeeds. We are currently in close engagement to define the dates for a mission, so we can make that progress I’m talking about,” she said.

ECB’s Centeno Says Current Stance Will Bring Inflation to Target (9:04 a.m.)

European Central Bank Governing Council member Mario Centeno said he’s confident that current monetary-policy settings will bring inflation back to the target.

“With the current level of interest rates, we will be making a substantial contribution to the 2% objective,” the Portuguese central bank governor told Bloomberg TV. “We will get there with continuing this monetary-policy stance, holding on for a while until we are totally sure that inflation is coming down.”

African Markets Shrink as Investors Flee Growing Uncertainty (9:00 a.m.)

African capital markets are smaller than they were a year ago after uncertainty triggered by Russia’s war in Ukraine, the steepest rise in global interest rates since the inflation shocks of the 1980s and currency depreciation led to investor flight.

The flight to safety pushed up the cost of debt and shrank the continent’s pension assets, foreign-exchange, stock and bond markets, according to Absa Group Ltd.’s latest Africa Financial Markets Index report, which evaluates the financial development of 28 countries.

Bank of Korea Warns of Potential Oil Impact from Conflict (8:49 a.m.)

Bank of Korea Governor Rhee Chang-yong said any potential widening of the Mideast conflict that spurs oil prices sharply higher could weigh on the bank’s growth forecast, but it’s too soon to gauge the impact at this point.

“If this issue will go beyond regional and across the whole Arab region, then that’ll have a large impact,” Rhee told Bloomberg TV’s Francine Lacqua.

Sri Lanka, China Agree to Restructure $4.2 Billion of Debt (6:44 a.m.)

Sri Lanka and China agreed to restructure $4.2 billion of debt, putting the South Asian nation closer to securing more funds from the International Monetary Fund.

The agreement reached “on the key principles and indicative terms of a debt treatment,” constitutes a key step toward restoring Sri Lanka’s long-term debt sustainability and economic recovery, the nation’s finance ministry said.

IMF Talks on Debt Deadlock Stuck Between China, Private Lenders (Oct. 11, 7:49 p.m.)

Global creditors are increasingly at odds over how to level the playing field among lenders when governments default, jamming up efforts led by the International Monetary Fund to expedite sovereign debt restructuring. 

Talks set for Thursday at the IMF’s annual meeting in Marrakech, Morocco, between various groups involved in restructurings — including China and private creditors — are unlikely to produce any breakthroughs, according to people who will be attending the session.

–With assistance from Adelaide Changole, Sam Kim, Alexander Weber, Ekow Dontoh, Jana Randow, Christopher Condon, Mirette Magdy and Martha Beck.

(An earlier version of this story corrected spelling of Israel in headline)

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