International Monetary Fund (IMF) chief Kristalina Georgieva warns of difficult times ahead for the global economy if the war in the Middle East is unresolved and oil prices stay high, adding that inflation risks could seep into food prices, AFP reports.

“We must brace for tough times ahead” if the conflict persists, she told reporters at a press briefing during the IMF and World Bank’s spring meetings in Washington.

US-Israeli strikes launched against Iran on February 28 sparked Tehran’s retaliation, virtually closing the Strait of Hormuz, a key shipping route for oil and fertilisers. Energy prices have since surged, squeezing countries.

“We are concerned about risks for inflation, moving into food prices should the delivery of fertilisers at a reasonable price [not be] restarted soon,” Georgieva says.

But as countries move to limit price shocks on their citizens, Georgieva has urged central banks to “wait and see” before adjusting interest rates if they can do so. She adds this is particularly the case where the public has a “well-anchored” expectation of inflation being kept under control.

“If we are to move faster out of the war, it may not be necessary to take action,” she says.

But Georgieva concedes that countries where central banks lack such credibility might need to send stronger signals.

For now, “we are still at a time when a faster resolution of hostilities is possible,” she says.