Iran war ends? IMF boss says the energy price pain may not

BANGKOK, Oct 7 — High energy prices resulting from the Iran war are likely to persist for some time, International Monetary Fund (IMF) Managing Director Kristalina Georgieva warned today, reported German news agency dpa.

“Price pressures may build further as demand rises with the approach of the Northern hemisphere cold season and as countries replenish reserves,” Georgieva said in prepared remarks for a speech in Singapore ahead of the annual meetings of the IMF and World Bank.

Even if the conflict ends soon, high energy prices are likely to persist for some time, she said, adding that Brent futures, for example, now predict high oil prices through 2027.

The annual meetings are due to begin next week in Bangkok.

The difficult situation on energy markets and the boom in artificial intelligence were adding to price pressures, Georgieva warned. Tariffs, defence spending and high levels of public debt could also fuel inflation.

“Now may be a good time for a prudently hawkish bias in many countries’ monetary policy,” Georgieva said.

She praised the US Federal Reserve, the European Central Bank and the Bank of Japan for already raising their key interest rates.

At the same time, Georgieva criticised the fiscal policies pursued so far by some advanced economies.

Higher policy rates were pushing up short-term interest rates, making debt more expensive.

Despite soaring public debt worldwide, she said high-debt advanced economies were not taking decisive action, while credible medium-term fiscal consolidation plans were urgently needed. — Bernama-dpa