War in the Middle East could wreak havoc on the world economy if it isn’t resolved soon, the International Monetary Fund warned on Tuesday.

Poor countries will suffer the most, while the U.S. will remain relatively insulated, the IMF said in its flagship publication on the global economy.

The Washington-based Fund warned that global growth could slow to as little as 2 percent this year without a speedy resolution to the six-week conflict in Iran, due to a combination of soaring energy and food prices and a big rise in market interest rates that could choke off capital flows to much of the world.

The same factors could push global inflation above 6 percent next year, it cautioned.

Finance ministers and central bank governors from around the world are set to talk about little else at the IMF-World Bank spring meetings this week in Washington, D.C., and the IMF’s numbers — like many from private-sector forecasters — make clear how serious the risks of a protracted major conflict are.

Hoping against hope

To be sure, the IMF’s baseline forecast still clings to the hope that things will return to normal by the middle of the year, leaving little more than a small dent in an economy that has performed more strongly over the last year than was widely feared when U.S. President Donald Trump launched his trade war against the rest of the world.

Under this central case scenario, growth would be 3.1 percent this year, only 0.2 percentage points less than the IMF thought in January. In 2027, it would be 3.2 percent, unchanged from the January forecast.

But under a severe scenario, with lengthy disruption to shipping in and out of the Persian Gulf and more widespread damage to energy production and export infrastructure, the IMF warned that oil prices could leap to an average of $125 a barrel by next year, and that European and Asian natural gas prices could triple. This could force central banks around the world to raise interest rates sharply to contain a new global wave of inflation.

The effects of such a disaster would be unevenly spread, the IMF warned, saying that: “In both [adverse and severe] scenarios, the impact on emerging markets would again be greater than that on advanced economies.”

The U.S. economy, by contrast, would be reasonably well shielded from the shock, given its status as a net exporter of energy, and given that looser fiscal policy and optimism about the adoption of artificial intelligence are both supporting investment and consumption, at least for now.

But for energy importers, things look a lot worse. The IMF slashed its baseline forecast for U.K. growth this year by 0.5 percentage points to 0.8 percent, and cut its forecast for the eurozone to a little over 1 percent both this year and next, trimming its estimate by 0.2 points in both cases.

For emerging markets excluding China overall, it warned that growth may fall by nearly two percentage points in a severe scenario. Rising import bills for food and energy, it said, could “put those with limited reserves at risk of balance of payments distress and social unrest.” It highlighted Sub-Saharan Africa as being particularly at risk.

The IMF acknowledged that all of its forecasts were subject to extreme uncertainty, given the extraordinary level of geopolitical volatility.

However, in a speech last week, IMF Managing Director Kristalina Georgieva warned that the conflict, and its effects on food and fertilizer markets, could leave as many as 360 million people in or at risk of hunger. It could also lead to countries asking for as much as $50 billion more from the IMF to help with balance of payment problems, she argued.