THE surge in oil and liquefied natural gas (LNG) prices triggered by the Middle East conflict is once again putting the resilience of the global economy under strain, according to Managing Director of the International Monetary Fund (IMF), Ms Kristalina Georgieva.
In an interview with Bloomberg Television on Friday, Georgieva noted that the global economy has so far demonstrated remarkable strength despite repeated shocks in recent years. “The world economy has been remarkably resilient. Shock after shock, and yet growth is at 3.3 percent,” she said, while cautioning that the latest spike in energy prices is again testing that resilience.
Georgieva explained that if global energy prices remain roughly 10 percent higher for a full year, the impact would feed into inflation and growth. According to her estimates, such an increase could add about 0.4 percentage points to inflation while reducing global economic growth by between 0.1 percent and 0.2 percent. She made the remarks on the sidelines of the Asia in 2050 Conference held in Bangkok, according to Oilprice.com.
The IMF chief also disclosed that the Fund is already engaging with the most vulnerable energy-importing economies to explore possible financial support should energy prices and market uncertainty rise further.
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Speaking earlier at the conference on Thursday, Ms Georgieva warned that a prolonged conflict could have far-reaching consequences for the global economy. According to her, sustained tensions could influence energy prices, market sentiment, inflation, and overall economic growth, potentially forcing policymakers to take additional measures to stabilise their economies.
She noted that for many countries in Asia, the key concern is energy security and the confidence that comes with stable supply. Financial markets in the region have already begun reacting to the unfolding situation, she added.
In South Korea, which had been the world’s best-performing equities market in 2025, market volatility surged to new highs during the week. The Seoul stock market experienced its largest-ever single-day crash on Wednesday, with heavy selloffs concentrated in chipmakers and technology companies.
Investors fear that escalating tensions in the Middle East and rising oil and gas prices could reignite inflation globally and weaken economic growth prospects. As a result, traders across Asia have been offloading technology stocks amid concerns that an energy-driven inflation shock could delay anticipated interest rate cuts.
Asia remains particularly exposed to the current energy shock because many of its largest energy consumers, including China, Japan, South Korea, and India, depend heavily on crude oil and LNG shipments from the Middle East transported through the strategic Strait of Hormuz.
