IMF's Gita Gopinath Warns: $85 Oil in 2026 to Slash Global Growth, Spike Inflation

• Gita Gopinath, former IMF Chief Economist, warns that crude oil averaging $85/barrel in 2026 will severely impact the global economy.
• This price level could reduce global economic growth by 0.3-0.4% and increase headline inflation by 60 basis points.
• The warning revises previous 2026 growth projections of 3.3%, which assumed stable oil prices before the Iran conflict.
• Expensive crude oil directly raises costs for transport, manufacturing, and logistics, leading companies to pass these costs to consumers.
• Higher inflation reduces purchasing power, slows consumption, and forces central banks to maintain higher interest rates, hindering investment.