IMF chief warns Middle East conflict could fuel global inflation

Tokyo, March 9 – International Monetary Fund Managing Director Kristalina Georgieva warned on Monday that escalating conflict in the Middle East could push global inflation higher, saying a sustained 10% increase in oil prices throughout most of the year could add about 40 basis points to worldwide inflation.

Georgieva delivered the remarks at a symposium hosted by Japan Ministry of Finance in Tokyo, where she said the conflict was once again testing the resilience of the global economy.

Georgieva said higher energy costs triggered by the regional conflict could have broad economic implications if oil prices remain elevated for an extended period.

According to her estimate, a persistent 10% rise in oil prices would translate into roughly a 0.4 percentage point increase in global inflation.Her comments underscore concerns among policymakers that geopolitical tensions in the Middle East could disrupt energy markets and complicate efforts by central banks to bring inflation under control.

Addressing officials and economists at the Tokyo symposium, Georgieva urged governments and central banks to prepare for heightened uncertainty in the global economy.

“My advice to policymakers in this new global environment is think of the unthinkable and prepare for it,” she said, referring to the potential economic shocks stemming from geopolitical instability.

Georgieva added that the latest Middle East conflict was placing additional strain on an already fragile global recovery, highlighting the need for policymakers to remain vigilant as risks to growth and price stability evolve.