The Managing Director of the International Monetary Fund, Kristalina Georgieva, warned on Monday that escalating conflict in the Middle East could increase inflationary pressures worldwide, particularly if oil prices continue to rise.
Speaking during a seminar hosted by the Ministry of Finance (Japan), Georgieva said that every 10 percent increase in oil prices, if sustained for most of the year, could raise global inflation by about 40 basis points.
She noted that the global economy is facing another major challenge amid the unfolding regional tensions. “We are witnessing a new test of the economy’s resilience in the face of the new conflict in the Middle East,” she said.
Georgieva also urged policymakers around the world to prepare for unexpected economic shocks in the current volatile global environment, reports Al-Rai daily.
“My advice to policymakers in this new global climate is to think about the unthinkable and prepare for it,” she added.
Her comments come as oil prices have surged amid geopolitical tensions, raising concerns about the potential ripple effects on global growth, inflation, and financial stability.
