Washington, United States – Web Desk: The International Monetary Fund (IMF) has warned that a prolonged conflict involving Iran could significantly worsen global economic conditions if it continues through 2027 and pushes oil prices to $125 per barrel.
IMF Managing Director Kristalina Georgieva said in a statement that the institution’s earlier economic forecasts no longer align with the evolving geopolitical situation.
The IMF had previously projected that tensions stemming from a U.S.-Israel conflict with Iran would lead to a moderate slowdown in global economic growth and only a slight increase in inflation.
However, Georgieva cautioned that a prolonged war scenario combined with sustained high oil prices could trigger more severe economic consequences, including deeper growth slowdowns, rising inflation, and increased pressure on global markets.
The warning comes amid heightened geopolitical instability in the Middle East, where disruptions to energy supply routes — particularly around key chokepoints like the Strait of Hormuz — remain a major concern for global trade and energy security.
Analysts say that oil prices at $125 per barrel could strain both developed and emerging economies, increasing production costs, weakening purchasing power, and intensifying financial volatility worldwide.
