<div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>The head of the International Monetary Fund (IMF) has warned the </span><a href="https://www.9news.com.au/iran" rel="" target="_blank" title="Iran "><span>Iran </span></a><span>war will cause permanent scarring on the global economy even if the fragile two-week ceasefire holds.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>In a keynote address yesterday, Kristalina Georgieva said the conflict has reversed the global economy's recent surge, which was driven by the </span><a href="https://www.9news.com.au/artificial-intelligence" rel="" target="_blank" title="AI boom"><span>AI boom</span></a><span> and tech investment.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"In fact, had it not been for this shock, we would have been upgrading global growth," she told attendees in Washington.</span></div></div><div><div id="adspot-mobile-medium"></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><strong><span>READ MORE: </span></strong><a href="https://www.9news.com.au/world/donald-trump-alex-jones-candace-owens-tucker-carlson-megyn-kelly-usa-news/7ecda21e-08cd-49a7-8166-bbd47975ad53" rel="" target="_blank" title=""><strong><span>Trump rages at some of his biggest former backers</span></strong></a><strong></strong></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"But now, even our most hopeful scenario involves a growth downgrade. Why? Because of significant infrastructure damage, supply disruptions, losses of confidence, and other scarring effects.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"Even in the best case, there will be no neat and clean return to the status quo ante."</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Georgieva noted there are still unknowns about the war, but said what is certain is that growth will be slower and persist "even if the new peace is durable". </span></div></div><div><div class="OUTBRAIN" data-reactroot="" data-src="//www.9news.com.au/world/international-monetary-fund-iran-war-to-permanently-scar-global-economy-even-if-peace-is-reached/4b23a54b-65bb-44c4-8245-247b3881aa1b" data-widget-id="AR_5"></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>The IMF in October had forecast global growth of 3.1 per cent this year, down by 0.1 per cent from the previous year. </span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>That figure is expected to be much lower as each scenario the IMF has configured for its annual World Economic Outlook report, which will be published next week, shows a permanent impact on living standards. </span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Georgieva said she expects demand for IMF financial support to rise by up to $US50 billion ($AUD70.6 billion).</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><strong><span>READ MORE: </span></strong><a href="https://www.9news.com.au/national/aussie-businesses-slash-hours-work-from-home-fuel-crisis-iran-war/3f2d8e8c-9c0f-41b8-9f8a-3e0ef3e37268" rel="" target="_blank" title=""><strong><span>'There is no other option': Dire warning for Aussie businesses amid fuel crisis</span></strong></a><strong></strong></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>The US-Israeli war in Iran has cut the daily flow of oil and liquid natural gas by about 13 and 20 per cent respectively, according to Georgieva.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>This has led to increased prices at bowsers and fuel shortages across </span><a href="https://www.9news.com.au/national" rel="" target="_blank" title="Australia"><span>Australia</span></a><span>, as the nation gets most of its oil and gas from Asian refineries, which primarily get their oil and gas from the Middle East.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>While the </span><a href="https://www.9news.com.au/usa" rel="" target="_blank" title="US"><span>US</span></a><span>, </span><a href="https://www.9news.com.au/israel" rel="" target="_blank" title="Israel "><span>Israel </span></a><span>and Iran have agreed to a two-week ceasefire to reopen the Strait of Hormuz and restart the flow of oil, the agreement is shaky. </span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>There have been disagreements on elements of the agreements and all sides are poised to resume fighting. </span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>US President </span><a href="https://www.9news.com.au/donald-trump" rel="" target="_blank" title="Donald Trump"><span>Donald Trump</span></a><span> said the "Shootin' Starts, bigger, and better, and stronger than anyone has ever seen before" if a real agreement is not reached with Iran, adding that military assets will remain in the area until that happens. </span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><strong><span>READ MORE: </span></strong><a href="https://www.9news.com.au/national/australia-appears-to-distance-itself-from-unpredictable-trump/c93bb15f-26a5-4c5c-a77f-45db5a91301c" rel="" target="_blank" title=""><strong><span>Australia appears to distance itself from 'unpredictable' Trump</span></strong></a><strong></strong></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Israeli Prime Minister Benjamin Netanyahu warned his "finger remains on the trigger" and that "this is not the end of the campaign", while Iran is accused by its neighbours of failing to open the Strait of Hormuz. </span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>The global economic shock of the conflict has been widely compared to the 1970s energy crisis and the 2007 global financial crisis.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Georgieva said those two events showed how a new normal will be formed once the disruptions ease.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"Supply recovers and demand adjusts, new capacity comes on stream, energy efficiency rises," she said. </span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><strong><em><span>NEVER MISS A STORY:</span></em></strong><span> </span><em><span>Get your breaking news and exclusive stories first by following us across all platforms.</span></em></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><ul><li><strong><em><span>Download the 9NEWS App here via</span></em></strong><span> </span><a href="https://apps.apple.com/au/app/9news/id1010533727" target="_blank"><strong><em><span>Apple</span></em></strong></a><span> </span><strong><em><span>and</span></em></strong><span> </span><a href="https://play.google.com/store/apps/details?id=nineNewsAlerts.nine.com&amp;hl=en_AU&amp;pli=1" 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