Source: AFP
The IMF announced on Friday that it will revise its economic outlook for the Middle East and North Africa region due to the ongoing Israel-Hamas conflict.
The conflict will have wide-ranging consequences for “both people and economies” in the region, although the extent of the impact remains “highly uncertain,” IMF staff wrote in a blog post.
It did not say whether the revisions would be released before its next publication, which is expected in January.
“A large-scale conflict would pose a significant economic challenge to the region,” they said, calling on the international community to act to prevent further escalation.
In the event of a large-scale conflict, “it is certain that forecasts for the most directly exposed economies will be downgraded and that policies to protect economies from shocks and maintain stability will be critical,” the post added.
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Israel resumed its deadly bombardment of the Gaza Strip on Friday after a fragile truce collapsed, saying it had hit more than 200 targets in the densely populated Palestinian territory despite international calls for a fresh ceasefire.
The conflict between Israel and Hamas erupted on October 7, when gunmen from the militant group stormed the border from Gaza to Israel, killing about 1,200 people, mostly civilians, and taking about 240 people hostage, according to Israeli authorities.
In response, Israel announced that it would destroy Hamas and began a relentless bombing of Palestinian territory.
More than 15,000 Palestinians, mostly civilians, have been killed across the Gaza Strip since then, according to the Hamas government’s health ministry, including at least 178 people on Friday alone.
Among the hardest-hit sectors in the region outside of Israel and the Palestinian territories was tourism, which the IMF said accounted for between 35% and nearly 50% of MENA economies’ exports of goods and services in 2019.
![](https://images.yen.com.gh/images/7c6f6f355af4587f.jpg?impolicy=cropped-image&imwidth=256)
![](https://images.yen.com.gh/images/7c6f6f355af4587f.jpg?impolicy=cropped-image&imwidth=256)
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“Tourism-dependent economies such as Lebanon, where hotel occupancy rates fell 45 percentage points in October compared to a year ago, will see negative effects on growth,” IMF officials said.
Increased risk due to the conflict could raise borrowing costs, with negative effects for over-indebted economies, they warned.
Should the conflict continue, “fragile and conflict-affected states in the region, such as Somalia, Sudan and Yemen, could suffer a reduction in critical aid flows if the donor focus shifts away,” officials said. IMF.
They added that refugee flows could also increase “significantly”, which would intensify “social and fiscal pressures on host countries”.
Source: AFP