The International Monetary Fund (IMF) has warned of deteriorating global economic prospects stemming from the ongoing war in the Middle East involving Iran, the United States, and Israel. The conflict has already caused serious disruptions to energy supplies, rising oil prices, and increased volatility across financial markets.
IMF Managing Director Kristalina Georgieva stated that the war is leading to higher inflation and slower economic growth worldwide. In her words, “all roads lead to higher prices and slower growth.” Even if hostilities were to cease in the near term, the negative effects would not be fully reversed: the Fund still plans to downgrade its global growth forecasts and raise its inflation projections.
Georgieva noted that without the conflict, the IMF might have modestly upgraded its expectations — to 3.3% global economic growth in 2026. Those figures will now be revised downward. Already, a 13% reduction in global oil supplies is being observed, along with shipping disruptions through the Strait of Hormuz and damage to energy infrastructure.
In a recent interview with Reuters, the Fund’s chief emphasized that a prolonged conflict would create a “global but asymmetric shock,” affecting different countries in different ways. Poorer and developing economies are expected to be particularly vulnerable and may require additional financial assistance.
The IMF is preparing a full updated forecast as part of its April World Economic Outlook report, to be presented at the IMF and World Bank Spring Meetings. The Fund stresses that the duration of the war, the scale of infrastructure destruction, and the impact on supply chains will determine how deep the blow to the global economy ultimately proves to be.
For now, IMF experts conclude that the resilience of the global economy is once again facing a serious test, and policymakers around the world will need to prepare for a “new normal” defined by frequent shocks.