IMF chief: World must prepare for 'unthinkable' amid Middle East conflict

The ongoing conflict in the Middle East could hit markets and economies, while also creating unforeseen challenges, IMF Managing Director Kristalina Georgieva warned Monday in Japan, according to Bloomberg reports cited by Report.

If the new conflict is prolonged, it will clearly affect market sentiment, economic growth, and inflation, and pose new challenges for governments, Georgieva said.

She added that new shocks could arise even after the conflict ends, underscoring a continued climate of uncertainty.

"My advice to policymakers ​in this new ​global ⁠environment is think of the unthinkable and ⁠prepare ​for it," ​she said.

Georgieva's remarks came after oil prices surged to nearly $120 per barrel on Monday before retreating, amid escalating conflict in the Middle East and growing pressure on oil shipping routes and global energy infrastructure.

The IMF chief also noted that shipping through the Strait of Hormuz has dropped by 90% due to the conflict.