(Yicai) Oct. 11 -- A 10 percent jump in crude oil prices could add about 0.4 percentage point to worldwide inflation, the International Monetary Fund’s chief economist said after oil climbed by around 4 percent over the past few days in the wake of the Israel-Palestinian conflict.

“The work we've done in the Research Department at the Fund suggests that if there is something like a 10 percent increase in oil prices, this would weigh down on global output by about 0.15 percent in the following year and would increase global inflation by about 0.4 percentage point,” Pierre-Olivier Gourinchas said at a press briefing yesterday for the release of the IMF’s latest quarterly World Economic Outlook report.

“So that gives you a rough order of magnitude of what the effects could be,” he said, adding that “I emphasize that it's really too early to jump to any conclusion here.”

Regarding the impact of the Israel-Palestinian conflict on the disinflation process and monetary policy, Gourinchas told Yicai that the IMF is monitoring the situation closely.

“One of the things that we have observed already is that oil prices have increased somewhat over the last few days, by about 4 percent,” he noted. “This is something that we see often in situations where there is geopolitical instability in the region.

“This reflects the potential risk that there could be a disruption either in the production or transport of oil in the region,” Gourinchas added. “It's a little bit too early to assess how much of that move, those movements in oil prices are going to be sustained.”

In its World Economic Outlook report, the Washington-based IMF left its forecast for global growth this year unchanged at 3 percent, but lowered its projection for next year to 2.9 percent, down from its July prediction of 3 percent and well below the 3.8 percent average achieved between the years 2000 and 2019.

“Commodity prices could become more volatile, with increasing climate and geopolitical shocks,” the report said, representing “a serious risk to the disinflation strategy.

“Between June and September, oil prices have increased by about 27 percent, on the back of extended supply cuts from OPEC Plus countries, before falling back more recently by about 8 percent,” the report stated.

The latest escalation of the Israel-Palestinian conflict has pushed up global energy prices and brought new uncertainties to the disinflation process in various economies, the IMF noted. Global inflation is projected to decline gradually, but most countries are not likely to return to their inflation targets until 2025, it pointed out.

Editor: Martin Kadiev