Geopolitical issues concerning for global economy, Saudi Finance Minister says

Mohammed Al Jadaan says IMFC not the forum to resolve such issues

Saudi Finance Minister Mohammed Al Jadaan speaks at IMF headquarters in Washington. AFP

Saudi Finance Minister Mohammed Al Jadaan, the new chairman of the International Monetary and Finance Committee, on Friday called the rise in geopolitical tension "concerning", as the Gaza war threatens to spill over across the region.

During a press conference at IMF headquarters in Washington, Mr Al Jadaan noted such tension could have negative consequences for the world economy.

But he added that the IMFC was not the forum to resolve geopolitical issues.

“While recognising the IMFC is not the forum to resolve geopolitical and security issues and these issues will be discussed in other forums, IMFC members acknowledged that these situations have significant impacts on the global economy,” he said in a statement, referring to issues such as the wars in Ukraine and Gaza, as well as Red Sea shipping disruptions

He added that “today’s era must not be of war and conflict”.

Mr Al Jadaan's comments came at the conclusion of a week in which missile and drone strikes by Iran against Israel sparked fears that the Gaza war could draw other countries in the conflict.

Israel reportedly responded with an attack on a military base in Isfahan on Thursday night, but Tehran has so far played down the attack and signalled it would not retaliate.

Against the backdrop of geopolitical tension, higher interest rates and uneven economic activity, the IMFC said it remains important for countries to achieve price stability and strengthen their fiscal buffers.

“Obviously, advanced economies and emerging markets are in a lot better position than low-income countries. And basically, the focus is resilience,” Mr Al Jadaan said.

“We need to make sure that we provide that support. The IMFC members will continue to look for ways to provide our low-income country members with the support that is needed.”

Mr Al Jadaan added that IMF precautionary balances reaching 25 billion special drawing rights – an international reserve asset – will provide “a very good buffer” for the fund to use.

He also said the IMFC had agreed to finalise its domestic approvals from the October meetings by November.

IMF managing director Kristalina Georgieva, meanwhile, welcomed the commitments the UAE has made to the Resilience and Sustainability Trust.

“Much work to to follow on, but I … came out from the meeting really impressed by the ability of the membership to come together and I'm sure that we will build on today's momentum because the world needs that,” she said.