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Rising oil price to cut global growth: Gita Gopinath
Higher oil prices could also push global inflation up by about 60 basis points, she said.
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Malvika Choudhary - Thu, 19, Mar 2026
- 15:59 EDT
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FILE PHOTO: First Deputy Managing Director of the International Monetary Fund (IMF) Gita Gopinath participates in a seminar during the 2025 annual IMF/World Bank Spring Meetings in Washington, D.C., U.S., April 25, 2025. / REUTERS/Elizabeth Frantz/File Photo
Former Deputy Managing Director of the International Monetary Fund Gita Gopinath on March15 said global economic growth could slow by 0.3 to 0.4 percentage points if crude oil prices average $85 per barrel in 2026.
In a post on social media, Gopinath said higher oil prices could also push headline inflation up by about 60 basis points, highlighting broader macroeconomic risks from rising energy costs.
Also Read: U.S. trade deficits, not payments crisis: Gita Gopinath
If we are now looking at an average of $85 a barrel for oil for 2026 then that could shave off around 0.3-0.4pp from global growth. Headline inflation could rise by 60 bps. Before the Iran conflict global growth was projected at 3.3% for 2026 on the assumption oil would average…
— Gita Gopinath (@GitaGopinath) March 15, 2026
“If we are now looking at an average of $85 a barrel for oil for 2026 then that could shave off around 0.3–0.4pp from global growth. Headline inflation could rise by 60 bps,” Gopinath said.
Before the Iran conflict, global growth for 2026 had been projected at 3.3 percent, based on an assumption that oil prices would average $65 per barrel.
The remarks come amid escalating tensions in the Middle East that have disrupted global oil supply chains, particularly through the Strait of Hormuz, a critical transit route for a significant share of global crude shipments. The disruption has contributed to volatility in oil prices and financial markets.
The International Monetary Fund has warned that a sustained increase in energy prices could further weaken global output and raise inflation, depending on the duration and intensity of the conflict.
Higher oil prices are expected to increase transportation, food, and production costs, with emerging markets facing heightened risks from currency pressures and capital outflows.
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