IMF warns Middle East conflict could boost oil prices and global inflation

The International Monetary Fund cautioned that renewed fighting or heightened tension in the Middle East would raise oil, gas and commodity prices, intensify worldwide inflation and strain supply chains. Its World Economic Outlook projects global inflation could reach 4.7 % by 2026, with average crude oil at about $89 per barrel and overall world growth slowing to 3 %.

The IMF forecast for the region shows economic growth at only 0.7 % in 2026, with Iraq, Kuwait and Qatar likely to face contraction while Saudi Arabia is expected to grow at 1.7 %. The Fund also noted Pakistan’s growth estimate of 3.5 % for the new fiscal year, slightly below the government’s 4 % target, and a modest slowdown from the previous year’s 3.7 %.

The report emphasizes that geopolitical instability, energy‑market uncertainty and supply‑chain risks are the chief challenges to the global economy and calls for coordinated international cooperation to mitigate them.