IMF Chief Warns of Long-Term Economic Challenges from Middle East Conflict

IMF President Kristalina Georgieva warned at a seminar in Tokyo that long-term conflicts in the Middle East could impact markets and economies, presenting new challenges. She emphasized that policymakers need to prepare for a 'new normal' characterized by ongoing uncertainty. Georgieva noted that a 10% increase in energy prices would raise global inflation by 40 basis points and slow economic growth. She called on countries to strengthen their institutional and policy frameworks to support economic resilience and the private sector, and to use policy space flexibly when necessary, while also rebuilding buffers.