The prolonged Iran war is raising simultaneous concerns over global inflationary pressure and slowing growth, the head of the International Monetary Fund (IMF) has warned.
IMF Managing Director Kristalina Georgieva said in an interview on Tuesday that "all roads now lead to higher prices and lower growth" as a result of the Iran war, Reuters reported.
Georgieva said the IMF had planned to slightly raise its global growth forecasts, currently at 3.3% for this year and 3.2% for next year, had the war not occurred.
"Global crude oil supply has fallen by approximately 13%, and the impact of disruptions to oil and gas shipments is spreading to related industries such as helium and fertilizers," she noted.
"Even if the war ends quickly, a downward revision to growth forecasts and an upward revision to inflation forecasts are inevitable. If the conflict drags on, the shock will be even greater," she added.
The IMF is scheduled to release its World Economic Outlook on the 14th, which is expected to include scenario-based analyses of the war's impact.
Georgieva also cited geopolitical tensions, technological change, climate shocks, and demographic shifts, stressing that "even after recovering from this shock, we must not let our guard down against the next one."