The International Monetary Fund (IMF) Managing Director Kristalina Georgieva has warned that the ongoing Middle East conflict has unleashed a significant global economic shock, with wide-ranging implications for growth, inflation, and energy markets.
Speaking in a curtain-raiser address ahead of the IMF–World Bank Spring Meetings, Georgieva said the conflict has disrupted oil and gas flows, damaged critical infrastructure, and intensified uncertainty across global trade and transportation networks.
“The conflict has caused considerable hardship around the globe. My heart goes out to all people affected by this war and all wars,” she said.
Georgieva highlighted that major energy hubs, including liquefied natural gas facilities in the Gulf region, have suffered serious damage and could take years to fully recover, raising the risk of prolonged supply constraints.
Citing Qatar’s Ras Laffan complex as an example, she noted its strategic importance as a major LNG production centre, adding that it has faced severe disruption since early March and may require several years to return to full capacity.
Describing the situation as a “classic negative supply shock,” the IMF chief warned that even under an optimistic peace scenario, global growth is likely to slow. She added that more than 80 per cent of countries, largely net oil importers, remain highly exposed to rising energy costs and external imbalances.
Georgieva urged policymakers to avoid unilateral measures such as export restrictions and price controls, cautioning that such steps could worsen global instability and inflationary pressures. Instead, she called for coordinated and flexible policy responses.
The International Monetary Fund said the impact of the conflict is uneven across economies, with oil-importing and directly affected countries bearing the brunt, while some exporters may see short-term gains but still face broader spillover risks.
The IMF further warned of potential long-term “scarring” effects on the global economy, including disrupted supply chains and increased demand for financial assistance from vulnerable nations.
(With inputs from ANI)