The global economy is facing another dangerous combination of expensive energy, rising government debt and financial market uncertainty, according to the International Monetary Fund.
IMF Managing Director Kristalina Georgieva warned ahead of the IMF and World Bank meetings that higher energy costs could push inflation upward while weakening economic growth.
Reuters reports that Brent crude has climbed above $100 a barrel amid supply concerns and geopolitical instability.
High energy prices can quickly spread through the economy by raising transport, manufacturing and food costs.
At the same time, public debt remains historically high in several major economies, leaving governments with less room to respond to another downturn.
Georgieva urged governments to rebuild fiscal buffers and protect central bank independence as policymakers confront a more complicated economic environment.
For consumers, the biggest risk is familiar: higher oil prices can eventually appear in fuel bills, airline fares, delivery costs and everyday goods.
Markets are now watching whether the energy shock proves temporary or becomes a longer lasting problem.
