IMF Warns of Economic Strain if Mideast War Pushes Oil Prices Higher

(MENAFN) The head of the International Monetary Fund, Kristalina Georgieva, warned on Wednesday that the global economy may encounter serious challenges if tensions in the Middle East continue and oil prices remain high.

During a press briefing held alongside the IMF-World Bank Spring Meetings in Washington, she noted that the organization is keeping a close watch on the situation in the region. She also expressed optimism that a ceasefire declared recently might help open the door to a more durable peace.

“The impact on the global economy is already large,” she said. “If the conflict persists and oil prices stay high for an extended period, we must brace for tough times ahead.”

Referring to the IMF’s latest economic projections, Georgieva explained that rising energy costs are affecting nations across the board, though countries that rely on energy imports are feeling the pressure more acutely.

When addressing how governments should respond, she emphasized the importance of careful and measured policymaking, warning against hasty or overly broad interventions.

She specifically advised against widespread measures such as general tax reductions, sweeping energy subsidies, or strict price controls, arguing that such approaches could worsen existing imbalances.

“While the intention behind these measures may be good … such untargeted actions will only prolong the pain of high prices,” said Georgieva.

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