The International Monetary Fund is “very confident” that the global economy will see a soft landing, its managing director Kristalina Georgieva said on Monday, adding that interest rates will start to fall by mid-year.

“We are very confident that the global economy is now ready for this soft landing that we have been dreaming about” after some of the steepest interest rate increases in decades, Georgieva said at the World Governments Summit Dubai.

Regarding the prospect of reducing interest rates in major economies, such as the United States, she added: “I hope to see interest rates heading in the direction that inflation has followed over the last year by mid-year.”

She said a prolonged war between Israel and Hamas would impact global economies. “What I fear most is the long duration of the conflict because (if) it continues, the risk of repercussions increases,” said the head of the IMF.

“Right now we see a risk of repercussions in the Suez Canal,” she said, referring to recent attacks on ships in the Red Sea. “But if there are other unintended consequences in terms of the direction of the fighting, then they could become much more problematic for the world as a whole.”

By Marc Jones