IMF Warns Worse Global Outcome If War Continues
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Washington, IMF Managing Director Kristalina Georgieva told a Milken Institute conference on Monday that the continuation of the war in the Middle East into 2027 would push inflation higher and could force oil prices toward about $125 per barrel, undermining the IMF's reference forecast and placing the lender's adverse and severe scenarios at greater risk.
Global growth under the IMF's reference forecast was projected at 3.1 percent with inflation at 4.4 percent, while an adverse scenario would lower growth and lift inflation to about 5.4 percent in 2026; Georgieva said the adverse scenario is already in effect given oil prices at or above $100 and mounting inflationary pressures this week.
More context
Timeline
- 1. April: IMF issues three scenarios (reference, adverse, severe) for 2026–27 global projections.
- 2. Early May: Oil prices hover at or above $100 per barrel amid Middle East tensions.
- 3. Monday, May 5: Georgieva speaks at Milken Institute in Washington, citing activated adverse scenario.
- 4. Georgieva states oil near $125 and conflict into 2027 would produce a much worse outcome.
- 5. Policymakers and markets monitor inflation, financial conditions, and growth forecasts for potential adjustments.
Why it matters
Continued Middle East conflict could push oil prices higher, leading to increased inflation. This means your everyday expenses, from gas to groceries, could rise. Keep an eye on your budget and consider ways to save on energy costs.
Sources
JQJO Editorial Desk · Human reviewed · AI assisted. Report a correction.
