IMF chief Georgieva warns of 'much worse outcome' if Middle East war drags into 2027

WASHINGTON - The head of International Monetary Fund on Monday warned that inflation was already picking up and the global economy could face a "much worse outcome" if the war in the Middle East drags into 2027 and oil prices hit around $125 per barrel.

IMF Managing Director Kristalina Georgieva said the continuation of the war meant that the global lender's scenario calling for a minor slowdown of global growth and a minor increase in prices was no longer possible.

As a result, the IMF's "adverse scenario" was already in effect, she said. Long-term inflation expectations remained anchored and financial conditions were not tightening, but that could change if the war continued, she told a conference hosted by the Milken Institute.

(Reporting by Andrea Shalal)

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This story was originally published May 4, 2026 at 4:32 PM.