Georgieva: US-Iran agreement is a correct step, and global economic recovery will take a long time
Friday, June 19, 2026 - 09:51 AM
Georgieva
IMF Managing Director Kristalina Georgieva considered that the ceasefire and the conclusion of the temporary truce agreement and the subsequent decisions to open the Strait of Hormuz within 30 days after mine clearance are a step in the right direction, and stressed that the conflict parties must adhere to discipline and flexibility in their policies.
What is the impact of the prolonged energy supply shock on countries?
Georgieva affirmed that the negative impact has extended to the entire global economy due to the prolonged economic shock and the closure of supply chains required more efforts to confront the successive crises and losses in economies. She said: "The recovery process will require a significant amount of time given the severe damage to infrastructure, so the announcement of a ceasefire on Sunday is a welcome step, but if the conflict crisis or disturbances return again, this will pose a clear risk to global growth."
IMF Managing Director's recommendations for monetary policymakers worldwide
The IMF Managing Director stressed that the continuation of uncertainty requires a degree of wisdom in managing monetary policy files, and policymakers in countries must be flexible and disciplined, especially since maintaining price stability is essential, and for this reason some central banks have begun monetary tightening to maintain stable inflation expectations.
IMF's position on rising borrowing costs
Regarding the IMF's position on rising borrowing costs, Georgieva said: "Fiscal discipline policies must be implemented with firm and precise frameworks, including some mechanisms such as price caps, subsidies, and similar interventions that are common and popular but very costly, so fiscal responses must be targeted, temporary, preserve price signals, and be well-programmed to protect the most needy groups without undermining public finances."
The necessity of creating space for investment in technology and people
She said: "Identifying the aspects of borrowing costs is a precise task, and the reason is the urgent need to create space for financial costs to ensure that AI-driven growth translates into shared prosperity. This includes the financial costs of addressing new vulnerabilities, as well as investment in technology and people to ensure that emerging and developing economies do not lag behind the march of reforming economies."
