Kristalina Georgieva, managing director of the International Monetary Fund (IMF), said global economic growth will slow due to the Iran war's fallout and, even in the best-case scenario, it will be difficult to fully return to the previous level.
Georgieva said in a speech at IMF headquarters in Washington, D.C., on the 9th (local time), "Even if a new peace holds, the pace of growth will slow," adding, "Even in the best scenario, there will be no clean and perfect return to the way things were."
She also added, "We cannot predict with precision the future of passage through the Strait of Hormuz or the speed of recovery in regional air travel."
On Feb. 28, when the Iran war began, the Strait of Hormuz, through which about 20% of the world's crude oil passes, was shut, sending energy prices soaring and triggering a chain reaction across the global economy.
The United States and Iran barely agreed on a two-week cease-fire and reopening of the strait on the 7th, but differences remain on key issues, leaving a fragile truce in place. The timing of a final settlement, including normalization of traffic through the Strait of Hormuz, remains uncertain.
Georgieva said the war has cut global daily crude oil supply by about 13% and liquefied natural gas (LNG) supply by about 20%, noting, "As a result, the energy expense burden has increased and global supply chains have been disrupted."
She also said rising energy prices are pushing up key commodity prices and fanning inflation. She added, "The impact on the global economy will vary depending on whether this cease-fire holds and the extent of the war damage."
The managing director said the shock is "asymmetric" by country, explaining that the impact varies depending on proximity to the conflict zone and whether a nation is an energy exporter or importer. She emphasized that while the share of renewable energy has increased, oil remains a major energy source, and countries should work to improve energy efficiency and diversify.
Reflecting the situation, the IMF projected demand for financial support will increase to at least $20 billion (29.464 trillion won) and up to $50 billion (73.66 trillion won), and it is set to release the World Economic Outlook (WEO) on the 14th.
Georgieva also said in a recent Reuters interview that "we will lower our global growth forecast to account for the impact of the war."