The director general of the International Monetary Fund (IMF), Kristalina Georgieva, said today, in Bangkok, that the world economy is “again being put to the test”, this time by the war launched by the United States and Israel against Iran.
“We live in a world where shocks are more frequent and unexpected, and we have been warning our members for some time that uncertainty is now the new norm,” he said during a conference debating Asia in 2050, taking place in the Thai capital, according to economic news portal FX Street.
“This conflict, if it were to continue, could obviously affect world energy prices, market sentiment and inflation,” added the IMF director general.
Triggered on Saturday by an offensive by the United States and Israel against Iran, the war spread quickly with Tehran’s response to the two countries’ various allies in the region, also threatening navigation in the Strait of Hormuz and the Persian Gulf, sending world oil prices soaring and plunging markets into turmoil.
“The markets have been riding like a rollercoaster in recent days,” described Kristalina Georgieva, stressing that “the conflict will place new demands on policymakers around the world.”
“The sooner this calamity ends, the better it will be for the entire world”, he continued, conceding however that the world is “potentially in a prolonged period of instability”.
Asia is the continent most affected by the crisis in the Strait of Hormuz, a strategic route through which around 20% of the oil and liquefied natural gas (LNG) sold in the world passes.
According to data from Kpler and the United States Energy Information Administration (EIA), between 84% and 90% of the crude oil that passes through Hormuz is destined for Asia, where 83% of the LNG from this crucial route also arrives, whose main buyers are China, India, South Korea and Japan.
Despite the context of energy uncertainty, Asia continues to be one of the great engines of the world economy, as the region generates “two thirds of global growth and concentrates around 40% of trade”, which means that “it is not possible to talk about the global economic future without mentioning Asia”, according to Georgieva.
The economist also highlighted that the continent faces several fundamental challenges to maintain this leadership in growth, including increasing productivity through the development of artificial intelligence (AI), and highlighted that countries like Singapore lead the levels of preparedness for the adoption of this technology.
Similarly, Georgieva noted that China and South Korea are among the leaders in the development and implementation of AI. India, he added, is driving initiatives to democratize access to artificial intelligence, while Indonesia, Malaysia and Thailand are advancing its application in commercial sectors.
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