IMF: Middle East Conflict Escalation Could Have Significant Economic Consequences

Displaced families, mainly from Syria, gather at Beirut's central Martyrs' Square, where they spent the night fleeing the overnight Israeli strikes in Beirut, Lebanon September 28, 2024. REUTERS/Louisa Gouliamaki
Displaced families, mainly from Syria, gather at Beirut's central Martyrs' Square, where they spent the night fleeing the overnight Israeli strikes in Beirut, Lebanon September 28, 2024. REUTERS/Louisa Gouliamaki
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IMF: Middle East Conflict Escalation Could Have Significant Economic Consequences

Displaced families, mainly from Syria, gather at Beirut's central Martyrs' Square, where they spent the night fleeing the overnight Israeli strikes in Beirut, Lebanon September 28, 2024. REUTERS/Louisa Gouliamaki
Displaced families, mainly from Syria, gather at Beirut's central Martyrs' Square, where they spent the night fleeing the overnight Israeli strikes in Beirut, Lebanon September 28, 2024. REUTERS/Louisa Gouliamaki

The International Monetary Fund said on Thursday that an escalation of the conflict in the Middle East could have significant economic ramifications for the region and the global economy, but commodity prices remain below the highs of the past year.

IMF spokesperson Julie Kozack told a regular news briefing that the Fund is closely monitoring the situation in southern Lebanon with "grave concern" and offered condolences for the loss of life.

"The potential for further escalation of the conflict heightens risks and uncertainty and could have significant economic ramifications for the region and beyond," Kozack said.

According to Reuters, she said it was too early to predict specific impacts on the global economy, but noted that economies in the region have already suffered greatly, especially in Gaza, where the civilian population "faces dire socioeconomic conditions, a humanitarian crisis and insufficient aid deliveries.

The IMF estimates that Gaza's GDP declined 86% in the first half of 2024, Kozack said, while the West Bank's first-half GDP likely declined 25%, with prospects of a further deterioration.

Israel's GDP contracted by about 20% in the fourth quarter of 2023 after the conflict began, and the country has seen only a partial recovery in the first half of 2024, she added.
The IMF will update its economic projections for all countries and the global economy later in October when the global lender and World Bank hold their fall meetings in Washington.
"In Lebanon, the recent intensification of the conflict is exacerbating the country's already fragile macroeconomic and social situation," Kozack said, referring to Israel's airstrikes on Hezbollah in Lebanon.
"The conflict has inflicted a heavy human toll on the country, and it has damaged physical infrastructure."
The main channels for the conflict to impact the global economy have been through higher commodity prices, including oil and grains, as well as increased shipping costs, as vessels avoid potential missile attacks by Yemen's Houthis on vessels in the Red Sea, Kozack said. But commodity prices are currently lower than their peaks in the past year.
"I just emphasize once again that we're closely monitoring the situation, and this is a situation of great concern and very high uncertainty," she added.
Lebanon in 2022 reached a staff-level agreement with the IMF on a potential loan program, but there has been insufficient progress on required reforms, Kozack said.
"We are prepared to engage with Lebanon on a possible financing program when the situation is appropriate to do so, but it would necessitate that the actions can be taken and decisive policy measures can be taken," Kozack added. "We are currently supporting Lebanon through capacity development assistance and other areas where possible."
 

 

 

 



Hapag-Lloyd Raises Outlook for Third Time on Strong Freight Rates

Hapag-Lloyd containers at a loading terminal at the harbor in Hamburg, Germany, July 13, 2025. (Reuters)
Hapag-Lloyd containers at a loading terminal at the harbor in Hamburg, Germany, July 13, 2025. (Reuters)
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Hapag-Lloyd Raises Outlook for Third Time on Strong Freight Rates

Hapag-Lloyd containers at a loading terminal at the harbor in Hamburg, Germany, July 13, 2025. (Reuters)
Hapag-Lloyd containers at a loading terminal at the harbor in Hamburg, Germany, July 13, 2025. (Reuters)

German container shipping company Hapag-Lloyd on Wednesday raised its full-year earnings outlook for the third time this year, citing strength in freight rates and a stronger-than-expected performance ‌in the ‌fourth quarter.

The stock was ‌up ⁠2.4% at 0925 ⁠GMT.

The upgrade adds to a series of positive outlook revisions across the European logistics sector, where resilient global trade, elevated shipping ⁠rates and persistent ‌supply-chain disruptions have ‌supported earnings and boosted profitability.

Hapag-Lloyd ‌now expects full-year earnings ‌before interest and tax of $2.0 billion to $2.4 billion, up from previous expectations of $1.25 billion to $1.75 ‌billion.

The company also lifted its 2026 earnings before ⁠interest, tax, ⁠depreciation and amortization guidance to $4.6 billion to $5.0 billion, from $3.9 billion to $4.4 billion previously.

The latest increase follows earlier upgrades in July and September, reflecting sustained strength in container shipping markets and management's improved expectations for year-end trading.


Gold Gains After Steep Drop, but Hawkish Central Bank Signals Weigh

People buy gold jewellery on the occasion of 'Dhanteras' as part of Diwali celebrations, the Hindu festival of lights, in Kolkata on November 6, 2026. (AFP)
People buy gold jewellery on the occasion of 'Dhanteras' as part of Diwali celebrations, the Hindu festival of lights, in Kolkata on November 6, 2026. (AFP)
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Gold Gains After Steep Drop, but Hawkish Central Bank Signals Weigh

People buy gold jewellery on the occasion of 'Dhanteras' as part of Diwali celebrations, the Hindu festival of lights, in Kolkata on November 6, 2026. (AFP)
People buy gold jewellery on the occasion of 'Dhanteras' as part of Diwali celebrations, the Hindu festival of lights, in Kolkata on November 6, 2026. (AFP)

Gold prices climbed on Wednesday, but remained anchored near the $4,000 level after a sharp selloff in the previous session following a hot US inflation print and hawkish policymakers' comments that tilted market expectations towards further and larger ‌rate hikes.

Spot ‌gold rose 0.5% to $4,051.31 per ounce ‌by ⁠0916 GMT after dropping ⁠as much as 3% to $4,013.29 on Tuesday. US gold futures for December delivery gained 0.7% to $4,059 per ounce.

"Gold is seeing some slight relief after its post-CPI declines," said Han Tan, chief market analyst at Bybit.

"However, it's a tough ask for gold bulls to keep pushing prices higher, given ⁠the prospects of more Fed rate ‌hikes in the pipeline."

Data released on ‌Tuesday showed US consumer prices rose more than expected in ‌October, with the CPI increasing 0.4%. Economists polled by Reuters ‌had forecast a 0.3% rise.

Traders raised the odds of a December Federal Reserve rate hike to 100% from 84% before the data, as per CME's FedWatch tool. Expectations of a ‌larger, half-percentage-point hike also increased.

Ahead of the data, Fed Governor Christopher Waller said a core inflation ⁠reading ⁠of 0.3% in October would prompt him to consider a half-point hike at the December meeting.

Other policymakers also maintained a hawkish tone, with Fed Bank of Philadelphia President Anna Paulson signaling further US rate hikes and Fed Vice Chair for Supervision Michelle Bowman reaffirming the central bank's focus on curbing price pressures.

Although gold is typically seen as an inflation hedge, higher interest rates diminish its appeal, as gold bullion pays no interest.

Among other metals, spot silver climbed 2.7% to $52.87 per ounce, and palladium gained 4.1% to $1,066.66 per ounce.


Oman Posts Third-Quarter Budget Surplus as Revenue Rises 16%

Visitors and locals gather at the Mutrah Corniche in Muscat, Oman, April 11, 2025. (AP)
Visitors and locals gather at the Mutrah Corniche in Muscat, Oman, April 11, 2025. (AP)
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Oman Posts Third-Quarter Budget Surplus as Revenue Rises 16%

Visitors and locals gather at the Mutrah Corniche in Muscat, Oman, April 11, 2025. (AP)
Visitors and locals gather at the Mutrah Corniche in Muscat, Oman, April 11, 2025. (AP)

Oman's ‌public revenue rose 16% by the end of the third quarter to 9.828 billion Omani rials ($25.53 billion), the Oman News Agency said in a post ‌on X on ‌Wednesday.

Public spending ‌rose ⁠9% to about ⁠9.74 billion rials, and the state budget recorded a surplus of about 90 million rials ⁠at the end of ‌the ‌third quarter.

Public debt ‌fell by more ‌than 600 million rials from a year earlier, to about 14.1 ‌billion rials from 14.7 billion.

Dues paid ⁠to ⁠the private sector and received through the financial system totaled more than 1.43 billion rials by the end of the third quarter.