The International Monetary Fund (IMF) has started a warning regarding the growing geopolitical risks and its potential effects on global economic stability. In its latest report on financial stability, the organization emphasizes that diplomatic tensions, military conflicts and terrorism are factors that interfere with markets, increase public loan costs and influence trust in financial institutions.
The IMF underlines the harmful effects of these events on the stock markets, especially in a significant decrease in shares, especially in emerging countries. On average, the markets experience 1 % by 1 % with every major geopolitical risk. However, this autumn is much more pronounced in emerging countries, where it reaches 2.5 %. According to the IMF, international military conflicts have particularly devastating consequences for the stock markets in these regions.
IMF experts warn that these geopolitical tensions could also influence public finances and could worsen the global economic situation. The combination of an economic slowdown and an increase in public expenditure endangers the financial stability of states, especially in a context of increased geopolitical risks at global level.
M.Ba.
