International Monetary Fund Managing Director Kristalina Georgieva has issued a stark directive to global policymakers, "think of the unthinkable" as escalating Middle East hostilities threaten to destabilise the world economy.
Speaking at a symposium in Tokyo on March 9, Georgieva warned that a prolonged conflict possesses the "clear and obvious potential" to derail market sentiment, stifle growth, and ignite inflation, forcing a radical shift in fiscal preparation.
The warning follows a volatile session where oil prices surged toward US$120 a barrel.
The spike was driven by the effective closure of the Strait of Hormuz—a vital maritime artery—which has seen shipping traffic plummet by 90%.
The disruption carries immense weight for Asia; Japan, which relies on the Middle East for 90% of its oil, now faces a heightened risk of stagflation as a weak yen compounds rising energy costs.