“According to a general rule of thumb, oil prices should be above $100 a year or longer, which means that the calculated effect on global inflation would rise by up to two percentage points with output declining by one percentage point,” says Kozack.

She further affirmed that the IMF had not been asked to provide emergency funding in the aftermath of the US-Israel war on Iran.

On February 28, the US and Israel attacked Iranian territory, beginning a war that has engulfed the Middle East and nearly brought the important Strait of Hormuz waterway to a virtual standstill.

The strait carries approximately 20 per cent of the global flow of oil and natural gas, and the oil crisis has sent energy prices flying, with possible repercussions on global inflation.

On 19th March, global benchmark Brent crude was being sold at approximately $110 a barrel, 52 percent higher than it used to be prior to the war.

Kozack said the most economically vulnerable states in the world would be the first to experience the impact.

“They have a narrow policy space, they have narrow buffers, and this is in a world where funding conditions are perhaps getting harder on them,” she said.

As Kozack pointed out, the Fund followed events on commodity prices, inflation and the global financial situation after the war.

She emphasised that the impact will be felt differently by countries depending on the composition of their economy, especially on the price of commodities.

Another area was the food prices.

“Shipment of fertilisers has been interrupted (by the conflict), and this,” she said, “as well as transportation disruptions, increases the risk of us having to witness food price increases, and the increases might be huge, depending, again, on the time and severity.”