International Monetary Fund Managing Director Kristalina Georgieva stated on May 4 that if the Middle East conflict persists until 2027 and oil prices reach around $125 per barrel, it would significantly intensify pressures on global prices and economic growth.

Georgieva indicated that the prolonged hostilities mean the IMF's previous forecasts of global economic growth slowing to 3.1% and inflation rising to 4.4% this year are no longer realistic. She warned that while long-term inflation expectations remain stable and financial conditions haven't tightened, these factors could change if the conflict continues.

Should the conflict extend through 2027 with oil prices reaching approximately $125 per barrel, Georgieva projected substantially worse outcomes. Inflation would rise significantly, and inflation expectations would inevitably become unanchored.

The IMF's mid-April World Economic Outlook Report projected that if the Middle East conflict's impact diminishes by mid-year, global economic growth would reach 3.1% in 2024, representing a 0.2 percentage point downward revision from January's forecast. Global inflation would rise to 4.4%, up 0.3 percentage points from 2025. If the conflict and high oil prices persist longer, global economic growth could decline to 2.5% this year with inflation climbing to 5.4%. In extreme scenarios, global growth might drop to approximately 2% while inflation could reach 5.8%.