IMF flags inflation risk amid Middle East oil shock

March 09, 2026 (MLN): IMF Managing Director Kristalina Georgieva on Monday cautioned that the ongoing conflict in the Middle East could drive global inflation higher.

Georgieva noted that a 10% increase in oil prices, if sustained for most of the year, could push global inflation up by 40 basis points, as reported by Reuters.

“We are seeing resilience tested again by the new conflict in the Middle East,” Georgieva said, highlighting the economic risks posed by geopolitical tensions.

She urged policymakers to adopt proactive strategies, stating: “My advice to policymakers in this new global environment is think of the unthinkable and prepare for it.”

At the same time, Pakistan is holding formal discussions with a visiting IMF mission in Islamabad.

The talks cover the Third Review under the Extended Fund Facility (EFF) and the Second Review under the Resilience and Sustainability Facility (RSF), led by IMF mission chief Iva Petrova and attended by Pakistan’s Finance Minister Senator Muhammad Aurangzeb and senior economic officials.

Key focus areas include fiscal performance, structural reforms, revenue mobilization, and energy sector improvements.

Pakistan recently posted its first current account surplus in 14 years, alongside a primary fiscal surplus of 1.3% of GDP in FY2025, showing stabilized inflation and improved fiscal management.

Completion of the review could unlock the next IMF funding tranche, boosting foreign exchange reserves and reinforcing macroeconomic stability.

Copyright Mettis Link News