IMF's Georgieva says sustained peace in Gaza 'would benefit the region'

International Monetary Fund managing director Kristalina Georgieva on Thursday said the end of the Gaza war could bring economic stability to the region.

Qatar's Emir Sheikh Tamim, Egypt's President Abdel Fattah El Sisi and Turkey's President Recep Tayyip Erdogan, as well as US President Donald Trump, met in Sharm El Sheikh this week to sign a document in support of the Gaza ceasefire deal.

Ms Georgieva said: “Everybody on this planet breathed a sigh of relief when the ceasefire was reached, for the sake of the people that have been affected and those waiting for their loved ones to go back home, those waiting for peace so they can move more freely in Gaza.

“It is important, of course, that everybody concerned encourages this direction of sustaining lasting peace, and yes, it would benefit the region.”

Spillover effects from the Gaza war have affected neighbouring countries' economies. Egypt lost a critical revenue source as Houthi attacks on ships in the Red Sea prompted a rerouting of trade from the Suez Canal to the Cape of Good Hope at the southern tip of Africa. Egypt's tourism sector also took a hit, with economic problems the country was already facing compounded by the conflict.

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The war has also affected Jordan's tourism industry and other sectors of its economy. The fund last year said the conflict was having a stronger impact than initially expected.

The IMF currently has programmes with Egypt and Jordan to support their struggling economies.

There are signs that Egypt's reforms are beginning to pay off. The fund upgraded its forecast for the Middle East and North Africa due partly to a stronger-than-expected economic performance in Egypt in the first six months of this year.

Potential for a sustained peace in Gaza is among a number of major geopolitical developments that experts say have the opportunity to reshape the trajectory of the Middle East.

It also comes as Syria aims to reconnect with the international community after the toppling of the Assad regime in December, plus the severe weakening of the Hezbollah militant group in Lebanon.

"This is a hinge moment that we are witnessing in the Middle East," Mona Yacoubian, director and senior adviser of the Middle East programme at the Centre for Strategic and International Studies think tank, said at a panel at the Institute for International Finance.

The IMF said this month that its programme with Jordan remains on track, with officials in Amman pursuing macroeconomic policies and structural reforms to support the country's resilience and boost growth led by the private sector.

Lebanon is requesting an economic programme with the IMF, while Ms Georgieva said Syria's new government is seeking the fund's support for the rebuilding of its central bank and other institutions.

She added: “When there is peace, there is also this benefit that those who are there to support you, it is easier, more viable for the support to become [a reality]."