IMF says worst-case global economy warning is now the working assumption - oil shock hit

AI summary

<p>IMF chief Georgieva has abandoned the fund's mild slowdown forecast, warning that if the Middle East war continues into 2027 with oil at $125 a barrel, a "much worse" global economic outcome must be expected.</p><p class="font-claude-response-body break-words whitespace-normal leading-[1.7]">Summary:</p><ul class="[li_&]:mb-0 [li_&]:mt-1 [li_&]:gap-1 [&:not(:last-child)_ul]:pb-1 [&:not(:last-child)_ol]:pb-1 list-disc flex flex-col gap-1 pl-8 mb-3"><li class="whitespace-normal break-words pl-2">The IMF's previous baseline forecast of a minor global growth slowdown and modest price increases from the Middle East conflict has been dropped, according to IMF Managing Director Kristalina Georgieva</li><li class="whitespace-normal break-words pl-2">Georgieva warned that if the war extends into 2027 alongside oil prices at $125 a barrel, a significantly worse global economic outcome should be anticipated, per her remarks on 4 May</li><li class="whitespace-normal break-words pl-2">Inflation is already beginning to rise, though Georgieva noted long-term inflation expectations remain anchored, keeping conditions short of the most dangerous threshold, per the IMF chief's comments</li><li class="whitespace-normal break-words pl-2">Georgieva described the price impact as a serious, slow-moving dynamic, suggesting the damage will compound gradually rather than shock markets immediately</li><li class="whitespace-normal break-words pl-2">The IMF's adverse scenario for the global economy is