The International Monetary Fund (IMF) is warning that developing countries such as Jamaica could be among those hardest hit by the escalating conflict in the Middle East.
The Washington-based IMF says oil-importing developing countries that are not major participants in the current artificial intelligence-driven technological boom face greater risks from higher energy prices and slower global economic growth.
Jamaica’s fuel import bill exceeded US$600 million during the first four months of this year and averages about US$2 billion annually. That is roughly US$400-to-$500 million more than the country earns from manufactured goods, bauxite and alumina, agricultural products and other merchandise exports.
The IMF projects global economic growth will slow to 3.4 per cent next year, from 3.5 per cent during 2024-2025.
It says the Middle East conflict will contribute to the slowdown, although increased investment in artificial intelligence is expected to partly offset the impact.
The Fund is also warning that higher energy prices will push global consumer price inflation to an average 4.7 per cent this year, up from 4.1 per cent last year.
Inflation is projected to ease to 3.9 per cent next year.