IMF chief Georgieva warns of worse global outcome if Middle East war drags on
Updated
Updated · Reuters · May 4
IMF chief Georgieva warns of worse global outcome if Middle East war drags on
5 articles · Updated · Reuters · May 4
Speaking in Washington, she said a 2027 conflict with oil near $125 a barrel would lift inflation, after the IMF's short-war baseline of 3.1% growth and 4.4% inflation became obsolete.
Georgieva said the IMF's adverse scenario is already unfolding, with global growth slowing to 2.5% in 2026 and inflation reaching 5.4%, while prolonged war could unanchor inflation expectations.
She also cited fertilizer costs up 30% to 40%, potentially raising food prices 3% to 6%, as Chevron warned the closed Strait of Hormuz could trigger oil shortages and economic contraction.
Will this historic energy crisis force nations to retreat from global trade and pursue costly energy independence?
With oil shortages crippling economies, will diplomacy or military force reopen the Strait of Hormuz first?
IMF Warns of Global Economic Crisis with Oil Prices Surging to $125 if Middle East Conflict Extends into 2027
Overview
The IMF warns that if the Middle East conflict continues into 2027, global oil prices could surge to $125 per barrel, driving inflation higher and risking a loss of confidence in central banks' ability to control it. This conflict also raises the risk of disruption at the Strait of Hormuz, a vital oil chokepoint, which could cause severe oil shortages hitting Asian economies first. These energy shocks disrupt fertilizer supplies, worsening food inflation and straining vulnerable emerging markets already facing debt distress. Policymakers face a tough balance between curbing inflation and avoiding economic slowdown, while coordinated international support aims to mitigate a looming global crisis marked by stagflation and financial instability.