International Monetary Fund Managing Director Kristalina Georgieva has cautioned that a ceasefire between the US and Iran would not instantly stabilise the global economy, warning of a prolonged period of adjustment.
Speaking amid ongoing tensions, Georgieva said the economic impact of the conflict would take at least three to four months to ease, even if fighting were to stop immediately, according to Al Jazeera.
Earlier on Monday, the head of the International Monetary Fund warned that inflationary pressures are already building and the global economy could face a “much worse outcome” if the Middle East conflict drags on until 2027 and oil prices rise to around $125 per barrel.
She said the continuation of the war has effectively ruled out the IMF’s “reference scenario”, which had assumed a short-lived conflict and projected a modest slowdown in global growth to 3.1% alongside a slight rise in inflation to 4.4%. “This scenario, with every day that passes, is further and further behind in the rear-view mirror,” Georgieva said.