Muscat: Kristalina Georgieva, Managing Director of the International Monetary Fund, warned that the ongoing escalation of the conflict between the United States, Israel and Iran could pose significant upside risks to global inflation.

Speaking at a seminar organised by Japan’s Ministry of Finance, Georgieva said the conflict in the Middle East is emerging as a major test for the resilience of the global economy.

Her warning came as oil prices surged dramatically during Asian trading, with Brent crude futures jumping more than 30 per cent to reach a peak of $119.50 per barrel, the highest level since 2022. West Texas Intermediate crude also climbed sharply, hitting a session high of $119.43 per barrel.

Georgieva explained that sustained increases in oil prices could have a measurable impact on global inflation levels.

“A 10 per cent increase in oil prices, if sustained for most of the year, could push global inflation higher by around 40 basis points,” she said.

She added that policymakers around the world must remain vigilant and prepare for unexpected economic scenarios as geopolitical tensions continue to unfold.

“We are witnessing a new test of the resilience of the global economy due to the new conflict in the Middle East, and policymakers must think about and prepare for unforeseen scenarios,” Georgieva noted.