WASHINGTON, May 4 (Reuters) - International Monetary Fund Managing Director Kristalina Georgieva warned on Monday that inflation is already on the rise and the global economy could face "much worse outcomes" if the war in the Middle East extends into 2027 and oil prices reach around $125 a barrel.

Georgieva said that the continuation of the war means that the IMF's scenario, which had assumed a slight slowdown in global growth and a slight rise in prices, is no longer realistic.

She added at a conference hosted by the Milken Institute that the IMF's "opposite scenario" is already in place. She explained that long-term inflation expectations remain stable and that financial conditions are not trending toward further tightening, but this could change if the war continues.