Global economy to still face pressures in energy & food prices

The International Monetary Fund has raised concerns over the ongoing crisis in the Middle East, warning that the situation could have far-reaching consequences on commodity prices and the cost of living worldwide. Julie Kozack, Director of Communications at the IMF, discussed the potential impacts of the crisis on the global economy in a recent interview with CNBC Africa. Kozack highlighted the immediate effects of the conflict, including a sharp increase in food and energy prices that have already begun to impact economies around the world. The IMF is closely monitoring the situation and will take into account the macroeconomic implications of recent developments in its upcoming assessments. Kozack emphasized that Ukraine, one of the countries most affected by the crisis, is facing significant challenges as a result of the conflict. The spike in food and energy prices has led to a cost-of-living crisis globally, with low-income countries bearing the brunt of the impact. While central banks have responded to the inflationary pressures by raising interest rates, this has resulted in increased debt-servicing costs for many low-income countries. The IMF acknowledges that the global economy continues to face challenges as a result of the crisis, and will provide a comprehensive assessment in its upcoming World Economic Outlook and regional outlook reports. Kozack also addressed concerns about Ukraine's debt sustainability, outlining three key conditions that must be met for the country's debt to remain viable. These conditions include continued fiscal consolidation, substantial concessional financing, and debt restructuring. She clarified that the scope of debt restructuring only includes official bilateral debt and external commercial debt, excluding multilateral debts like those owed to the IMF. The IMF remains committed to supporting countries impacted by the crisis and will continue to monitor the situation closely. As the global economy grapples with the ongoing challenges posed by the conflict in the Middle East, policymakers are working to mitigate the effects on commodity prices and living standards worldwide.