The ongoing conflict in the Middle East will drive up inflation while dampening global economic growth, according to the International Monetary Fund’s top official who spoke with Reuters on Monday.
Kristalina Georgieva, who serves as the IMF’s managing director, made these comments as the organization prepares to release updated economic projections next week.
Without the current warfare, the IMF had been anticipating modest improvements to worldwide growth estimates of 3.3% for 2026 and 3.2% for 2027.
“Had we not had this war we would have seen a small upgrade of our growth projections. Instead, all roads now lead to higher prices and slower growth,” Georgieva explained.
According to the IMF chief, even if fighting ends quickly followed by swift recovery, the organization would still make a “relatively small” downward adjustment to growth predictions while raising inflation estimates. Should the conflict drag on, she warned the economic impact would be more severe.
Georgieva revealed that several nations have approached the IMF seeking financial support, though she declined to identify which countries made these requests. She noted the fund could expand current lending arrangements to address these nations’ requirements.
