The International Monetary Fund and the World Bank warned Monday that the war in Gaza and the associated regional escalation affecting shipping movement in the Red Sea leading to the Suez Canal pose a threat to the global economy.

IMF Director Kristalina Georgieva explained that the ongoing war between Israel and Hamas since October 7 has already harmed the economy of the Middle East and North Africa region, expressing her fear that its indirect effects will be reflected in the global economy if the fighting lasts for a long time.

“I fear more than ever that the conflict will be prolonged, because if it continues, the risk of its expansion will increase,” Georgieva said during the World Government Summit, an annual gathering of state and business leaders in Dubai.

She added: “We are now witnessing in the Suez Canal the danger of its expansion,” referring to the attacks by the Houthi rebels in Yemen on commercial ships in the Red Sea and the Arabian Sea, which affect navigation traffic in the strategic region through which 12% of global trade passes.

Since November 19, the Iranian-backed Houthis have been carrying out attacks on commercial ships in the Red Sea and the Arabian Sea that they suspect are linked to Israel or heading to its ports. They say that this comes in support of the Gaza Strip, which has been witnessing a war between Hamas and Israel since October 7.

To try to deter them, American and British forces launched three waves of strikes on their sites in Yemen since last January 12. The US Army alone carries out strikes from time to time on missiles that it says are prepared for launch.

Following the Western strikes, the Houthis began targeting American and British ships in the region, considering that the interests of the two countries had become “legitimate targets.”

Late last month, the United Nations Trade and Development Organization (UNCTAD) announced that the volume of trade through the Suez Canal decreased by 42% in January and December.

Georgieva warned that if there are “(other) consequences regarding where the fighting takes place, it could be more problematic for the world as a whole.”

The war broke out in the Gaza Strip following an unprecedented attack by Hamas on southern Israel, killing more than 1,160 people.

Israel responded with a concentrated bombing campaign followed by a massive ground attack in the Gaza Strip, killing at least 28,340 people, the majority of them women and children, according to a tally by the Hamas Ministry of Health.

For his part, World Bank President Ajay Banga, also speaking during the summit, said that “what is happening in Gaza, in addition to the challenges in Ukraine… and the Red Sea” are among the biggest challenges facing the global economic outlook.

He stressed, “When these variables are added to what has already been shown to be perhaps the lowest growth rate over the past 55 years… this is something we must closely monitor.”