The International Monetary Fund on Thursday warned that prolonged increases in energy prices could drive inflation and lower growth globally.
The spokesperson for the IMF, Julie Kozack, told reporters that the conflict had already resulted in significant disruptions to seaborne oil and natural gas shipments, sending crude oil prices up by more than 50% to over $100 a barrel.
This is according to a Reuters report on Thursday.
Kozack stated that the global lender had not received any formal requests for emergency financing but stood ready to help member countries where necessary.
She said IMF officials were engaging actively with finance ministers and central bankers from member countries, as well as with regional institutions.
Kozack said the overall impact of the war would depend on its duration, intensity, and extent.
She cited an IMF “rule of thumb,” which held that every 10% increase in energy prices, if sustained for about a year, would result in a 40-basis-point increase in global inflation and a drop in output of 0.1% to 0.2%.
She warned that if oil prices remain over $100 for a year, that would translate into significant impacts on inflation and global economic output.
Central banks, she said, should remain vigilant in the wake of rising energy prices, with a careful eye on whether inflation was expanding beyond energy prices and whether inflation expectations were remaining well anchored.
She said the IMF’s preliminary assessment was that the war would weaken growth in Gulf Cooperation Council (GCC) countries but gave no specifics.
Much would depend, she noted, on the countries’ ability to resume exports of oil and gas supplies.
