The International Monetary Fund welcomed the recent peace framework in the Middle East, but warned that significant risks remain and that some countries are already suffering severe economic damage from higher energy costs, IMF managing director Kristalina Georgieva said in a statement on Monday.
The IMF said a resolution to the conflict would help ease pressure on the global economy. More than three months after the outbreak of war, the global economy has proved more resilient than initially feared.
Strong growth in the US and China, steady financial markets, and robust investment in technology sectors such as artificial intelligence have helped cushion the impact of a major energy supply shock.
Oil prices remain about 30% above pre-war levels, but government stockpile releases, higher production outside the Gulf region and measures to curb demand have helped prevent a sharper spike.
Inflation has risen in many countries, though medium-term inflation expectations remain largely anchored, reflecting confidence in central banks' efforts to maintain price stability.
The IMF said, however, that the relatively strong global picture masks substantial differences across regions.
Countries closest to the conflict have been among the hardest hit, with several Gulf oil exporters facing steep growth downgrades.
Europe's dependence on imported energy has increased inflationary pressures and weighed on growth, while emerging Asian economies are grappling with higher fuel costs, weaker currencies and rising borrowing costs.
The strain is particularly acute in Africa, where many countries depend heavily on imported fuel and have limited fiscal resources to absorb the shock.
Several countries have faced fuel shortages, while rising energy prices have pushed up fertilizer and food costs, raising concerns about worsening food insecurity.
The Fund cautioned that uncertainty remains elevated because of damage to regional energy infrastructure and the risk of renewed supply disruptions.
It urged policymakers to maintain fiscal and monetary discipline, warning that broad subsidies and price controls can become costly and undermine public finances.
The IMF said it is providing policy advice to member countries and is preparing additional financial support for nations facing higher financing needs as a result of the conflict.