Quick overview

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Kristalina Georgieva warned during a conference in Bangkok that markets could be affected if the conflict drags on.

The Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva, warned that a prolonged conflict in the Middle East could affect inflation, financial markets, energy prices and global growth, stressing that the war is testing the resilience of the world economy.

Her remarks were made during the Asia in 2050 conference held in Bangkok. In her speech, Georgieva analyzed the global outlook amid the military confrontation involving the United States and Israel against Iran.

“In recent days, global economic resilience has once again been tested by the new conflict in the Middle East,” she said.

She added that if the conflict persists, it has “clear potential to affect global energy prices, market sentiment, growth and inflation, creating new challenges for policymakers.”

IMF closely monitoring the situation

Georgieva said the IMF, “as the guardian of international economic and financial stability,” is closely monitoring developments.

The institution is also assessing and quantifying the regional and global economic repercussions, which will be reflected in the upcoming April edition of the World Economic Outlook report.

“So far, we have seen disruptions to trade and economic activity, sudden increases in energy prices and volatility in financial markets,” Georgieva warned.

She added that the situation remains highly fluid and is unfolding in an already uncertain global economic environment. “It is still too early to assess the full economic impact on the region and the global economy,” she said, noting that the outcome will depend on the scope and duration of the conflict.

“The new normal is uncertainty,” Georgieva concluded, stressing that the world is going through a period of major global transformations in technology, demographics, trade and geopolitics — an era of shocks and uncertainty.