The head of the International Monetary Fund has warned that the Iran war will permanently scar the global economy, even if a durable peace deal can be reached in the Middle East.
Speaking about the outlook, the IMF chief said that even the most hopeful scenario now includes a growth downgrade. The warning underlines how the conflict is expected to affect economic conditions well beyond the immediate fighting, with no expectation of a quick return to previous levels of stability.
In Australia, the debate over the federal government’s response to the war continues to intensify. Penny Wong’s previous statements, whether she has said she is concerned or gravely concerned, have been criticised as having had no effect.
Calls have also been made for Australia to cancel more than a billion dollars in Israeli arms contracts. Those arguing for cancellation say it would be a response to what they describe as the moral situation surrounding Israeli military attacks. They also argue it would place real material pressure on Israel to pull back from what they describe as a disastrous, illegal and immoral war in Lebanon.
Supporters of that position say Australia should not be buying weapons that have been tested by Israeli defence manufacturers in conflicts such as Gaza and Lebanon, and should not be contributing weapons parts.
They also argue that ending the contracts would send a clear message that there is a direct and real cost to Israel for continuing the war.
The comments come amid wider concern about the global consequences of the conflict and the political pressure building on governments to respond. The IMF warning adds to that sense of uncertainty, with the economic outlook now expected to worsen even under more optimistic assumptions.
Live coverage of the broader Australia news agenda also includes political developments in the states, including a key board appointment given to Peter Dutton by the Queensland government and rolling half-day strikes planned by Victorian teachers.
The day’s coverage continues as federal and state issues unfold, with the war, its economic consequences and Australia’s policy response remaining central to the discussion.
