Washington: The International Monetary Fund (IMF) announced that a sustained rise in energy prices, resulting from the ongoing conflict in the Middle East, may drive global inflation higher and affect economic output. This warning came during a media briefing where IMF spokesperson Julie Kozack discussed the potential broader economic consequences, which largely depend on the duration and intensity of the conflict. According to Anadolu Agency, Kozack identified three primary channels through which the economic impact is being monitored: commodity prices, inflation and inflation expectations, and financial conditions. She highlighted significant disruptions already occurring, such as the closure of the Strait of Hormuz, which has obstructed access to 20% of the world's oil supply and seaborne LNG flows while damage to energy infrastructure in the Gulf and Iran hampers oil and gas production. Kozack emphasized the impact on commodity prices, noting that oil and natural gas prices have surged over 50% in the p ast month. Additionally, disruptions to fertilizer shipments and broader transport bottlenecks are increasing the threat of rising food prices. She mentioned that persistently high energy prices could lead to increased headline inflation and broader price pressures through second-round effects, making inflation expectations a crucial area of focus. Historical patterns, according to Kozack, suggest that a 10% sustained increase in oil prices could elevate global headline inflation by about 40 basis points and reduce global output by 0.1% to 0.2%. She also noted tightening financial conditions, with global stock markets declining and bond yields rising, trends observed in economies such as the United States, Britain, and Europe. Developing economies are experiencing increased volatility, a strengthened US dollar, and weakened local currencies. The IMF plans to provide a comprehensive update on global, regional, and country-level outlooks in its upcoming World Economic Outlook report in April. On the regional front, Kozack reported that initial IMF assessments indicate weaker growth in Gulf economies. While higher energy prices might offset lower output in some countries, regional fiscal and external balances are likely to face pressure. However, Gulf Cooperation Council countries have substantial policy buffers and have enhanced their resilience through reforms and economic diversification efforts. For Europe, Kozack pointed out that the main transmission channel is energy imports, with tighter financial conditions expected to impact the economic outlook. She added that IMF staff have revised their assessment of the conflict's effect and higher oil prices on the US economy for the country's Article IV consultation report. Addressing concerns about the US public debt reaching $39 trillion, Kozack reiterated the IMF's recommendation for Washington to reduce its fiscal deficit and ensure public debt follows a firm downward trajectory. On monetary policy, she advised central banks to remain vigilant regarding the i nflationary impacts of higher energy prices, particularly the potential effects on inflation expectations. Kozack also mentioned that while the IMF remains in close contact with member countries, no formal requests for emergency financing have been received yet. Nevertheless, the Fund is prepared to deploy its available tools to support members as conditions evolve.