IMF warns Middle East conflict fuels inflation and supply disruptions
The conflict in the Middle East is causing big problems for global supply chains: think higher prices and shortages, not just for oil and gas but also for food, transport, and even semiconductors.
According to IMF chief Kristalina Georgieva, oil supplies have dropped 13% and liquefied natural gas is down 20%, which means energy prices are spiking and inflation is hitting countries everywhere.
Over 360 million face food insecurity
Food insecurity has gotten worse, now impacting over 360 million people as fuel shortages lead to refinery shutdowns. Fertilizer costs are up too, making things tougher for farmers.
The IMF suggests governments may need to offer targeted support or central banks to raise interest rates to keep inflation in check.
As Georgieva puts it, Financial markets have already begun adjusting. Borrowing costs have risen.