IMF Chief Warns of Global Economic Impact if West Asia Conflict Extends to 2027

Kathmandu. International Monetary Fund chief Kristalina Georgieva has indicated that if the ongoing war in West Asia extends until 2027, there is a possibility of a more serious impact on the global economy.

Speaking at an event organized in Washington D.C., she signaled that oil prices could reach up to 125 US dollars per barrel, which would further increase inflation.

According to her, in such a situation, not only will inflation increase, but the confidence in price stability in the future may also weaken.

The International Monetary Fund has already placed the current situation under a 'adverse scenario', which includes aspects such as prolonged conflict, high oil prices, and increasing inflationary pressures.

Among the three possible scenarios released in April, 'reference forecast', 'adverse scenario', and 'severe scenario' were included.

According to the adverse scenario, global economic growth is estimated to be limited to 2.5 percent in 2026 and inflation to reach 5.4 percent. If the more serious 'severe scenario' is implemented, there is a possibility of economic growth falling to 2 percent and inflation reaching 5.8 percent.

Similarly, in the 'reference forecast', which assumed a short-term conflict, economic growth was expected to be 3.1 percent and inflation 4.4 percent. However, looking at the current situation, it is indicated that such a positive scenario is gradually moving further away.