WASHINGTON, May 5 (Bernama-Sputnik/RIA Novosti) - If the conflict around Iran continues into 2027 with oil prices standing at around US$125 per barrel, the global economic outlook will deteriorate significantly, IMF Managing Director Kristalina Georgieva said on Monday.
"If this continues in 2027 prices, and we have oil price of US$125, more or less, then we have to expect a much worse outcome," Georgieva said at a Milken Institute event.
She noted that such a scenario could push inflation higher and cause inflation expectations to become unanchored.
On February 28, the United States and Israel launched strikes on targets in Iran, causing damage and civilian casualties. On April 7, Washington and Tehran announced a two-week ceasefire. Subsequent talks in Islamabad ended inconclusively, and US President Donald Trump extended the cessation of hostilities to give Iran time to come up with a "unified proposal."
The escalation has nearly halted traffic in the Strait of Hormuz, a key route for the delivery of oil and liquefied natural gas from Persian Gulf countries to global markets, driving up fuel prices.
On Monday, Trump said that he is already seeing the energy prices going down and is expecting the prices to decline substantially when the war is over.
--BERNAMA-SPUTNIK/RIA NOVOSTI
