‘Think of the unthinkable and prepare for it’, IMF warns on Iran war impact on global economy

A 10% increase in crude oil prices, if it holds, can result in a 40 bps increase in global inflation, IMF Managing Director Kristalina Georgieva says.

The International Monetary Fund has warned of inflation risks from an escalating Iran war, as a direct fallout is the surge in crude oil prices.

MF Managing Director Kristalina Georgieva. (Reuters)

A 10% increase in crude oil prices, if it sustains throughout the year, can result in a 40-basis-point increase in global inflation, IMF Managing Director Kristalina Georgieva said on Monday.

“We are seeing resilience tested again by the new conflict in the Middle East,” Georgieva said, speaking in a symposium hosted by Japan's finance ministry. “My advice to policymakers in this new global environment is think of the unthinkable and prepare for it.”