IMF warns US strikes on Iran could disrupt global economy
JEDDAH: The International Monetary Fund has warned that US airstrikes on Iran could amplify global economic uncertainty, with potential spillovers far beyond energy markets, its head told Bloomberg on Monday.
IMF Managing Director Kristalina Georgieva said that the fund is closely monitoring the situation in the Middle East, particularly the impact of the conflict on oil and gas prices and supply routes.
Georgieva's remarks come after the US military conducted targeted strikes on nuclear facility sites in Iran, effectively involving itself in Israel's campaign to dismantle the country's nuclear program, despite Tehran's threats of retaliation that could spark a wider regional conflict.
US President Donald Trump stated that Iran's key nuclear sites were 'completely and fully obliterated' and warned the country against retaliatory attacks, asserting that the US could strike additional targets 'with precision, speed and skill.'
Georgieva told Bloomberg that the IMF are looking at this 'as another source of uncertainty in what has been a highly uncertain environment' adding that the institution is watching for two things: 'One, how would that impact risk premia for oil and gas. There has been some movement upward— how far would it go? And two: would there be any disruption in energy supplies?'
She went on: 'For now, no. But let's see how events would develop— whether either delivery routes or spillovers to other countries may occur. I pray, no.'
The development saw Brent crude briefly rising by as much as 5.7 percent to $81.40 per barrel during early Asian trading on June 23 before retreating, according to Bloomberg.
When asked whether the transmission mechanism, specifically the channels where she sees the greatest impact of the Middle East shock, is currently reflected in energy prices, the managing director confirmed that it is.
'There could be secondary and tertiary impacts. Let's say there is more turbulence that goes into hitting growth prospects of large economies, and then you have a trigger impact in a downward revision in prospects for global growth,' she told Bloomberg.
'As you know, we have already revised downward growth projections for this year, and we will be coming up with our next projections in July.'
Georgieva continued: 'What we see in the first two quarters of the year broadly confirms the picture we painted in April, and it is somewhat slower global growth, but no recession.'
The IMF's April report sounded a warning over the weakening global economy, sharply downgrading growth forecasts from January projections.
The fund identified surging trade tensions, record-high tariff levels, and rising policy unpredictability as key threats to both short- and long-term economic stability.
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